I have no doubt Artificial Intelligence, as defined today, will aid in answering a lot of questions regarding production, but I wonder if it will be beneficial in today’s ag-commodity markets as it pertains to price-outlook and price risk management. It currently lacks intuition, experience, proactive analysis, and knowledge of eco-political events, and it doesn’t farm.
It is the second anniversary of what I saw as a new paradigm shift in the way we do business in the global playing field. I appear to have been alone in that outlook given the continued negative focus by most analysts in the media.
I am ok with that as Carroll Brunthaver, former president of Sparks Companies once told me years ago, “You want to be a market maker, not a market follower.”
The futures market (CME formerly CBOT) is just that, a “futures” market designed to look ahead and not backward and is “the” market maker. It is that premise I realized the paradigm shift long before the current administration was elected with tariffs, wars, and transition payments. I don’t think AI saw it coming nor the events that evolved; astute research, being pro-active, and price action (futures market) did indeed portend a higher long-term price trend.
The evolution of price action as depicted in the December futures chart reflects important facts relevant to opportunities for both the bulls, bears, producers and buyers alike. To ignore the benefits is tantamount to being naive at best or apathetic at worst.
Reviewing the last seven months of market pricing for the 2026 December corn futures market reveals a lot for the bulls and the bears. Since Jan. 15, 2026, after the nasty Jan. 12 WASDE report that sent corn and soybeans retreating, the trading has pretty much evolved as expected by this writer.
- The markets did not top mid-February as most media analysts suggested would happen. Gulke Group analysts stated in 2025 price appreciation would be good in Q1 2026 with fundamentals discounted for spring outlook by mid-May.
- That top on May 13 came at the disappointing release of the China/Trump Summit fact sheet that caught speculators and global analysts leaning the wrong way.
- The “reset” was the result of the gain from Jan. 15 to May 13 of 50 cents (to $5.05) followed by a drop of 70 cents to bottom June 30.
- On a per-acre basis, gross revenue of $1.20/bu. X 183 national yield = $220/acre.
- Most market advice was focused on cost of inputs rising and the plight of the farmer, while ignoring revenue potential making the hype a relatively unimportant point—but negative news sells.
- The disappointing aspect of this riches-to-rags event was that little attention was paid by input suppliers (companies), co-ops or land-grant university economists, and suppliers of foo-foo dust to increase production, thereby reinforcing the false premise that we can produce ourselves into prosperity.
- Worse yet, not a question of concern from readers concerning opportunity or adversity.
Agriculture has changed no doubt but regardless of this new age of agriculture being too important politically to fail, the undeniable fact is that the crop has to eventually be sold, and the market understands that fact. I went through something similar in my early years of farming when price-risk-management was coming into its own and I began writing this column.
I watched friends concentrating on producing themselves into prosperity while ignoring marketing. I found on a 2,000-acre farm in Illinois it was not all that hard to gross $50,000/year more via astute marketing. That meant after 7 to 10 years, my machinery was paid for as well as not being beholden to a bank for working capital. Crop insurance, RMA, and HTA weren’t in my mix either. That was then, this is now.
Compared to a 5,000-acre Illinois corn farm today, at risk is about 1.2 million bushels of corn. Using the price volatility example above, the gross income moved about $2.6 million. Even figuring half that is still $1.3 million. One can only guess how many family farms pay income tax on $1.3 million?
The analysis above is extreme indeed and shockingly simplistic to believe. Do the math in your own situation: can you really afford to be disinterested or apathetic regarding price discovery? There may be a multitude of reasons to ignore the price risk-management message and money is not the only important thing in life, but it is the only way we have to keep score. Apathy seems alive and well in today’s marketplace.
To be successful one only has to be 10% better than the competition. The difference between the pay scale of a baseball .300 hitter and a .200 hitter is significant, but the high-salary batter only has to succeed one more at-bat out of 10 times up than the lower-salaried player.
PRICES: We began exiting our hedges on June 15–16 and then again June 30 exiting all hedges and purchasing upside call options for the ability to re-hedge or increase cash sales at higher prices and still have upside protection. Since June 30, unsold/unhedged inventory has gained significant value. As we go to press, since June 30, wheat is up 92 cents, corn 45 cents, and soybeans 79 cents. Market tops come when media is the most bullish—it doesn’t appear we are there yet!
