Don't Be Discouraged By Seasonal Lows

September 20, 2017 10:11 AM

More red on the futures board and December corn contracts below $3.50 per bushel aren’t lifting spirits as harvest continues to work northward. Joe Vaclavik, president and founder of Standard Grain, told AgDay host Clinton Griffiths history shows what will and should be happening this time of year. 

"Historically when you've got crops that are near trend and you've got adequate supplies, you tend to follow similar patterns," said Vaclavik. "This year, I think that it fits the bill, to see weakness in August, September and the first part of harvest.”

He says the normal seasonal low for corn over the past 15 or 30 years is generally around October 1st. 

"People hoped this year the yields were going to be lighter," said Vaclavik. "That could still be the case before it's over, but you've got to go with the idea that we're kind of following a normal seasonal pattern here."

Vaclavik isn't surprised by market weakness as harvest continues, given past performance. Producers need to prepare for if and when the market moves higher.

"If you're a grain marketer or a farmer, you have to think that this is probably not a good time to be making flat price sales, and historically—it isn't," said Vaclavik. "You've got to be prepared for some sort of post-harvest event."

If a post-harvest rally happens, Vaclavik says that's when there's the opportunity to improve margins.

"If you can tack 20 or 30 cents on the corn market or 50 on the bean market, that might be the time to play catch up on some sales, especially knowing that we had a big crop and we're still going to be well-supplied," said Vaclavik. 

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Spell Check

Cutler, IN
9/21/2017 06:51 AM

  Right store your grain so you can have 20 to 30 cents in storage fees to catch a 20 or 30 cent rally.

Eastern , IA
9/21/2017 09:02 PM

  Build a grain bin...20-30 cents pays for on farm storage really fast


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