Corn into truck

In recent weeks the corn market has been a technical one, with both the wheat and the corn markets hitting contract lows and investment funds reacting by selling into the market.

In short, it’s not a great time to be selling corn or wheat, according to Don Roose, president of U.S. Commodities of West Des Moines, Iowa.

It also doesn’t help that the snow is finally beginning to melt in the Midwest after a couple of cold months. Considering that the 2018 harvest was a wet one when little anhydrous was applied to fields, that will put some pressure on farmers this spring as they make the decision whether to plant corn or soybeans. A late fall and a late spring is not a good combination, Roose says.

Another factor that can’t be ignored is international trade. Roose says the ongoing trade dispute with China, along with the fact that the United States has yet to officially approve the United States-Mexico-Canada Agreement (USMCA) is a problem for the grain markets.

When President Donald Trump abruptly ended talks with the head of the North Korean government this month, many traders expressed concern that it could impact the trade talks with China, Roose adds.

Farmers in Argentina and other parts of the world are also grappling with poor grain prices. The bottom line is that the price outlook is not very good at the moment.

With that in mind, Roose says that now is not a good time for most farmers to be selling 2019 corn or wheat. But it may be a good time for them to make some “courage buys” of calls for September. Those calls might offer enough price protection to “give them the courage to make actual sales later in the season.”

Meanwhile, he advises farmers to do their financial homework, know their break-even price and then be realistic in marketing their grain in the coming months.

Gene Lucht is public affairs editor for Iowa Farmer Today, Missouri Farmer Today and Illinois Farmer Today.