I will start this week’s blog with the disclaimer: No two years are alike and of course, past results are not indicative of future performance.

Now that that’s out of the way, it really feels like we’ve been here before. We have talked a lot about the correlation between 2014 and 2024 corn charts and the similarities keep popping up.

We are a day away from the quarterly stocks report and annual acreage report. While we have seen some minor deviations, the two charts are mirroring each other once again. The closing price for December corn for June 26, 2014, was $4.43’2 and on June 26, 2024, we are trading $4.43’2.

In the wheat market, our team looked back to find similar years that matched up with this year. The year of 2009 was a great year to compare production, ending stocks and stocks-to-use. The price action of all three wheat classes in 2024 have taken the same path as the wheat did in 2009.

When you set out on a trip to an unknown territory, do you use a roadmap? When you’re making your production plans and harvest plans, I’m sure you make plans with your team. If I had to guess, you have probably had some days that didn’t go as planned. Maybe, you had to change what you planted, have a custom crew help you finish up harvest, or try to find a field dry enough to plant. You had to take a detour from your road map.

The marketing roadmap can be used in the same fashion.

We encourage producers to have knowledge of what their cost of production is and have a profit goal in place. This is what I consider our destination. With a lot of ways to get there, it’s not a bad idea to look around and see what the road looked like when you were there before (all along keeping the same destination at focus and using the tools available to avoid the potholes and speedbumps).

Did you miss a sign?

For example, we have had numerous calls this week discussing the recent downtrend in corn, soybean and wheat prices. All at one point had given us the opportunity to reach our destination. Unfortunately, some travelers didn’t pack their 4-way or extra tank of gas (put options and cash sales) to keep them on the highway. When producers feel like they will never get back on the road, we encourage them to regroup and prepare to reach the destination.

If we look back to the last time we saw this route, we are reminded that the road can stay bumpy and maybe even get worse. A couple of ideas that we have implemented recently for guys that have nothing done at this point was to make some sales here and re-own with calls. I suggested buying them at the money call and selling two calls at a profitable level to make the spread premium cheaper. This lets them participate from here and when we get to the top of the spread that strike level will represent another selling price.

The other idea is to buy at the money puts and sell a call at a profitable level to make put premium cheaper. Both are not as good as they once were, but we are going to have to park a little further away from our final destination than we once could have.

Any guesses on planted acres?

One of the big road signs ahead of us comes this Friday with the USDA’s annual acreage report and quarterly stocks report. This report has provided some excitement in the past. The big questions will be in the corn and soybean planted acres.

Trade estimates on planted corn acreage are for 90.353 million acres. This is up from the March estimate of 90.036 and lower than last year’s 94.641 million acres. The trade estimate range is from 89 to 91.3 million acres.

If you have any additional questions, we are always happy to help. You may reach out to me directly at 608.384.5438 or any of the AgMarket.Net brokers at 844-4AG-MRKT.

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