The past couple of weeks highlight just how quickly corn prices can advance and retreat. Looking at December corn futures shows a contract low on Friday, June 26th at $3.22. We ended that day at $3.2525. Then, the weather forecast changed to hotter and drier over that weekend, and the Board of Trade had three straight days with higher closes, ending July 1st at $3.6050, after topping out at $3.63 earlier in the day. So, in three short days, we were up more than 40 cents from the low. Now, keep in mind, we also had the USDA’s update on acres planted that knocked off five million acres of corn.
Finally, on Friday, July 10th, we had another USDA report updating supply and demand estimates. This event took more than 10 cents off December corn prices. Over the weekend, the forecast changed again and we’re now looking at more of a normal weather pattern with perhaps a little more moisture over the next week to 10 days. This led to lower grain prices on Monday, when we traded almost 30 cents lower than that recent high set just 7 trading days prior.
“The good board giveth, and the good board taketh away”.
Years ago, I worked with an older gentleman that had been in the grain industry for quite a while. He had a saying for times like these: “The good board giveth, and the good board taketh away”. The saying was his way of providing some levity during stressful events. But, when I think about it, the saying also talks about choices that we all make. I know that many of you priced some old crop and new crop corn during the past couple of weeks. That appears to have been a good choice.
Another choice that many people made earlier this year involved enrolling bushels into our “averaging contract”. The pricing window for corn ended on Friday, July 10th with an average futures price set at $3.438 per bushel. It’s interesting to note that December corn futures ended at $3.4475 on July 10th. So, after all the ups and downs we’ve seen since the program started pricing bushels on March 16th through the close on July 10th, we ended up within a penny of the July 10th close. Pretty amazing, if you ask me. The key will be where December futures are on October 1st. For now, this also appears to be a pretty good choice by those enrolled, especially with the change in the weather forecast. Our soybean averaging contract still has a couple of weeks to run. We’ll update again at that time.