Market Commentary for 3/7/25
May corn started the week down 15 cents, likely due to the tariffs being implemented on the US’s 3 largest trading partners.Yesterday, values rallied with the news that tariffs on Mexico would be lifted for at least a month.This helped May corn finish the week similar to the previous week, but it is still down almost 50 cents from last month.
December corn closed the week at about the same level as last week too.This still leaves new crop corn down about 25 cents from the calendar year’s high.Some farmers have been asking, “are the highs for the year already in?”
History Says the Highs for the Year Probably Haven’t Happened
While it’s impossible to know for certain, the following provides some historical insight.The chart below shows which calendar month, in the year the crop was grown, that the December contract hit its high for the last 35 years.
So far in 2025, December corn’s high was on February 20th when it hit a tick below $4.80.Since 1990, December corn has never hit its high in February.90% of the time, it has happened after February, with 50% of the highs happening in May, June, or July.
In just the last 10 years alone, corn hit its high for the year 8 times in late spring or early summer. In the other two years, one was in January and the other in November.
Spring Insurance Price History
This year the spring insurance corn price is $4.70. Each year since 2001, December corn has eventually traded above the spring insurance price at some point.
In the last 24 years, December corn hit its high in January 3 times (2001, 2013, and 2024).In each of those years, December corn still managed to trade above the spring insurance average value at some point in the year.In 2001, it beat the insurance level by 1 cent in July.In 2013, it beat the insurance average by 8 cents in June.And in 2024, it beat the insurance level by 30 cents in May.
Bottomline:
While it is possible the high for the year was hit 2 weeks ago, history suggests it may be too early to be concerned about new crop corn values.There is still a good chance December corn prices could exceed $4.80 or even $5.00 in the next 6 months.
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