If you have unpriced old-crop corn, you’re not alone. A recent AgWeb.com poll, which ran Dec. 6 to Dec. 12, asked the question: How much of your 2022 corn crop do you have priced/sold?
With more than 1,700 responses, the results show only 22% of farmers have 81% to 100% of their corn crop priced, while 29% have none to 20% of their corn crop priced. This corresponds with a July AgWeb.com poll on the same subject. See the full results:
“There was no incentive for farmers to get cash because we’ve gotten payments in the mailbox for the last two years,” says Jerry Gulke, president of Gulke Group. “That matches the age-old attitude by a lot of traders that says farmers don’t like to pay income tax, they’re going to wait till the first of January to sell.”
Yet, Gulke says, farmers could have easily priced grain in October for a January payment.
“I do that in my situation to make my schedule F look about as lean as I can, and then worry about that problem next year when I get the money,” Gulke says. “Then I have a whole year to worry about it, and if we get another price bonanza next year, we’ll have another good problem.”
Corn prices basically topped around $7 this past spring and early summer, Gulke says. With old-crop prices now closer to $6, that has also slowed farmers’ sales.
For farmers who have not priced much of their 2022 corn crop, Gulke says it’s time for some soul searching. Ask yourself: Why didn’t I sell corn when it was $7?
“There were great opportunities for selling corn at over $7,” he says. “From here you can say, ‘Well I don’t know exactly where grain prices are going to go, but I know where they’re not going to go. They’re not going to go back to $7 anytime soon short of a crop problem next spring.’”
As you plan your post-harvest marketing, Gulke suggests reviewing what price levels you sold corn at this year.
“If you look at the total sales and you did 75% good prices and you now have to sell 25% of your corn at the bottom of the price range, your average is still pretty good,” he says.
Soybean Prices Hold Support
The good news, Gulke says, is that soybean prices have not fallen apart like corn.
“In soybeans, we’ve been given an opportunity to sell close to $15 an old-crop beans,” he says. “I made the comment a long time ago, I don’t want to store $14 beans, and I didn’t.”
Now, the soybean market’s focus will be on Argentina and Brazil.
“I think Brazil is raising enough to offset the loss in Argentina,” he says. “If we lose 1 million tons in Argentina, that’s 37 million bushels, which is not a lot. In about six weeks or so we’re going to be very uncompetitive to Brazil, which for all practical purposes has a good crop. So, it doesn’t look like there is a soybean production problem on the horizon.”
2023 Crop Marketing Strategies
As the calendar flips to 2023, Gulke says he’s focused on making small corn and soybean sales for new-crop grain.
“I like to sell 10% to 15% of my crop, maybe in the cash market if the price is good,” he says. “Then the 85% left unsold could be covered by insurance. I want to sell at least that much, especially as I buy fertilizer.”
The current market action does not seem to be waging an acreage battle for the U.S. come spring.
“The new-crop corn market is around $6, which is a good dollar or more less than this year, and the market doesn’t seem to be concerned about that,” Gulke says. “But soybeans are still up around $14 per bushel. It looks much better for beans than for corn.”
Lower export demand and likely lower cattle feed demand are also keeping corn prices subdued, he says.
“At some point in time, we’re not going to have a big cattle herd to feed corn to or at least not near as large as it was last year or the year before,” Gulke says. “You can make up for that with feeding more chickens, but they don’t eat as much corn per pound as cattle. So, I think we have a problem out there with feed usage for next year’s corn crop.”
Overall, he says, the market seems to be saying it’s not concerned about whether farmers plant a million more acres of corn or not next year.
“The market is acting like we don’t need any more corn than we produced last year,” Gulke says.
Check the latest market prices in AgWeb’s Commodity Markets Center.
Jerry Gulke farms in Illinois and North Dakota. He is president of Gulke Group Advisory Services. Disclaimer: There is substantial risk of loss in trading futures or options, and each investor and trader must consider whether this is a suitable investment. There is no guarantee the advice we give will result in profitable trades. Past performance is not indicative of future results.
