Just when you thought the work was done: Navigating summer grain markets

By Garth McDorman, Ohio State University

Spring planting is over. We’ve cleaned up machinery, done some spraying, and hopefully sold some new crop grain at good values. Our work here is done for the summer, right? Maybe, maybe not. One of the final tasks some may face before harvest is something they may dread: cleaning out the grain bins. While it may not be the most enjoyable job because it is hot, dusty, and potentially dangerous, the fact that we sometimes don’t have this grain sold yet may be most concerning. So how do we make the correct decision on when and how to sell this grain? I bring this up mostly because we are exiting what has historically been the best time of year to market our grain. We are also in what could be considered a weather market, where grain markets are highly sensitive to weather forecasts. On top of that, the markets are still closely watching geopolitical tensions between the U.S. and other countries. All of that to say, a lot of volatility can occur this time of year, so now that we are out of the tractor cabs, let’s be cognizant of what the markets are doing to finish out this year strong.

As previously mentioned, historically, pricing in May/June tends to be our best pricing window for our corn and soybeans. And note, prices do tend to drop into late summer, so now we could be dealing with an even shorter window to best market our old crop. A little data to back up that claim: from 1990 to 2023, December corn futures experienced their lowest pricing in November/December 12 times, and eight times in July/August. Soybeans are a little less complicated for late-summer pricing opportunities, but that doesn’t mean they offer better pricing opportunities. During that same 1990-2023 timeframe, November soybeans stretched their lows across multiple months, all in the latter part of the year. November soybeans made their lows six times in July/August and six times in September/October, with May/June at five times and Nov at five times as well. So, let’s be proactive and have future targets set or in mind for what we want for the remainder of this year. Utilize the tools offered to you by your grain purchaser; they may have several different tools to utilize this time of year. It’s not a lost cause at this point, potentially just an uphill battle.

We’ve discussed the futures side; a similar pattern often carries in summer basis values. Basis typically weakens at this time of year, though we may see short-term “blips” in demand from local processors. In Ohio, ethanol plants and soybean crush facilities may raise basis levels to secure enough grain to bridge the gap into the new crop, encouraging bushels to move out of storage. As the season progresses, grain is marketed steadily, and supplies can tighten by late summer. When this happens, processors may find themselves short of their desired position heading into the fall. That situation can create pricing opportunities for growers, particularly in August and September, as buyers look for inventory to make that transition from old crop to new crop. Overall, late summer can be a challenging period, but it also has the potential to create mutually beneficial opportunities for both producers and grain buyers.

If this article feels like a bit of a roller coaster, that’s because the grain market tends to be one too—just when you think the work is done and it’s time to coast into summer, the markets may have other plans. While history suggests we may be past the “best” pricing window and headed toward softer values, there’s always that nagging possibility the market throws in a surprise rally or a late-summer basis bump when supplies tighten. Between weather scares, global headlines, and last-minute processor demand, the story rarely follows a straight line. Be safe and good luck.

Consider enrolling in the Ohio State University Extension Basics of Grain Marketing online course during the Summer session, with open enrollment beginning June 1 to July 30.  The course closes for all students on September 15, at the end of the Summer session. Contact https://go.osu.edu/grainmarketing ,email Wm. Bruce Clevenger clevenger.10@osu.edu