After trading in a 15- to 20-cent sideways pattern for the past two months, July corn futures appear to be potentially breaking through resistance levels on charts – to the upside.

Finally, enough snippets of friendly news may be accumulating at the same time to provide fundamental support for a price breakout move to the upside.

What’s happened

Here are the pieces of the puzzle, potentially falling into place to provide a “spring low.”

From a marketing perspective

“I swear I’m going to pull the trigger on pricing my grain if we get a summer rally. I just didn’t sell enough last summer.” Memories of last summer’s $1.20 corn rally and $3 soybean rally in one month’s time still linger for many producers.

The grain market rallied fast last summer. Producers were wrapping up planting and were quite concerned about the hot and dry weather forecast bearing down on Midwestern crops. It was emotionally hard to “pull the trigger” on cash sales, with the crop struggling to grow in the ground.

While it took one month for the market to gain that $1.20 price action in corn, unfortunately the 2023 summer rally fell apart in just over one week’s time.

You also need to decide if the market rallies, where are you going to set your next targets for cash sales, and how much will you plan to sell?

Vice versa, if the market starts to fall lower, will you have the discipline to make the cash sale?

One way to develop a balanced approach is to cash contract a comfortable percentage of your expected production on a potential “summer rally.” On that summer rally, also set a floor with the use of put options on the remainder of your expected production.

If you make cash sales, remember call options can be purchased to offset forward contracts, providing the potential for upward price appreciation. Also, some producers have told us that having call options in place gives them the confidence and discipline to forward sell.

A balanced approach can allow you to participate if the market heads lower or higher. More importantly, it keeps your emotions in check so you can make responsible sales. Have thorough conversations with your advisor as to when and how to implement such a strategy.

Prepare yourself

With rain occurring for many portions of the Midwest, delaying spring planting, use these rainy days as an opportunity to plan out your marketing strategies! The final late spring/early summer rally can come and go in a frenzy and you need to be ready with your plan.

Grain marketing is a process that is dependent on a wide, ever-evolving set of circumstances. Yet with a consistent and disciplined approach, you will gain confidence in your skills. Creating a plan now plays a crucial role in avoiding the consequences of a wait-and-see approach to grain marketing.

Reach Naomi Blohm at 800-334-9779, on X (previously Twitter): @naomiblohm, and at [email protected].

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