Consider the structure of the corn and soybean markets when you make plans for this fall’s new-crop grain movement. In mid-July, December 2022 corn futures were trading at less than a dime discount to the May 2023 contract, and the May contract was at a slight premium to July 2023 futures.
The structure of the soybean market was even flatter. January 2023 soybean futures carried a 7¢ premium to November 2022 futures and November futures were at a premium to May 2023 and July 2023 futures.
READY TO MOVE
This structure (or forward curve) in corn and soybean futures should have you focused on this fall’s “Priority 1 bushels.” Those are the bushels you know you do not have space to store on-farm.
With little incentive to wait to deliver any of this year’s soybean crop, make sure Priority 1 soybeans are ready to move from the combine to the truck and to town this fall. There is little (if any) incentive to pay for commercial storage to delay sales of Priority 1 soybean bushels.
With that decision made, you should also consider if any soybeans should be stored to deliver next year. Market conditions can — and very likely will — change, but that risk can be managed with futures and/or options when it is necessary.
The decision for corn isn’t quite as clear cut. There are logistics and grain quality issues to consider, but the structure of the corn market makes it difficult to justify the cost of commercial storage on these bushels; have a plan to move Priority 1 corn bushels into the cash market this fall.
Check the latest market prices in AgWeb’s Commodity Markets Center.
As Farm Journal Economist and host of the “AgriTalk” radio program, Chip Flory helps farmers understand the markets and seize opportunities.
