Spring means plenty to do, and with crop prices mostly struggling, it might be inviting to put marketing chores on a deep back burner. But some of these tasks may need the same attention to timeliness that you take with planting.

Here’s a checklist to consider right now.

Gone to voicemail

Be sure to return calls from grain merchandisers or brokers, especially if you have futures or hedge-to-arrive contracts tied to May corn and soybean futures. First notice day for the nearby is April 30, so you’ve likely already had this chat, but talking and doing are two different things. And if you don’t do anything, delivery of cash grain or liquidation of futures may result.

One alternative might be to roll a position forward. But any decision should be a case-by-case judgement, both practical in the here-and-now and projected – what could happen the rest of this spring and summer.

Immediate cash-flow needs may make delivery preferable, and these, as well as projected profits from extending storage should consider the elephant in the room that’s sometimes overlooked in the equation: costs. On-farm storage, especially if it’s paid for and debt-free, is easy to minimize, even when this isn’t a good accounting practice. But the expense includes more than energy to keep air on the grain and labor to monitor conditions.

Higher interest rates increase this burden, whether the bill comes from a bank loan or returns from risk-free investments for parking cash received from sale of the commodities. Ag loan interest rates roughly parallel the “prime rate” money center banks charge their best corporate customers. Prime is unchanged since last fall, when Federal Reserve branches reported ag rate averages between 8.5% and 9%, though individual charges may vary depending on the source, such as equipment companies, or when fixed term debt was put into place. But with short-term Treasury Bills backed by the “full faith and credit” of the U.S. Government around 5.5%, raising cash can be an alluring alternative to cash grain.

Consider how the CME-Group, owner of the CBOT, figures how commercial grain companies do the math, which puts the rate 1% less than prime, around 7.5%, but also adds in daily facility storage charges of $13.25 for a 5,000-bushel contract, or 8 cents a month. That’s the rate some elevators charge farmers, too. Many local elevators are less, but it’s a benchmark that makes off-farm storage a non-starter economically most years.

Those holding grain in these commercial facilities typically aren’t speculating on cash prices to go up, and elevators themselves are usually prohibited from taking such risk, which can cause failures when holdings go south. Instead, this grain is hedged, limiting risk to basis fluctuations. Hedgers also add in spreads between nearby contracts and those for later delivery, which some years are enough to pretty much guarantee a profit.

In corn this “carry” between May and July settled at 10 cents Friday, under six cents a month, while in soybeans the difference was 12.75 cents, or under 8 cents. Neither was completely enough to pay the facility charge alone, not to mention two months of interest totaling around 5.5 cents a bushel for corn and 14.6 cents for soybeans.

Location, location

Of course, basis appreciation sometimes foots the bill and more, and that’s where your local market rules. Red-hot demand sometimes sparks such rallies, or the reverse when it’s ice-cold, which often reflects seasonal concerns. Bad weather limiting grain flow can make end users nervous or desperate enough to pay up, though this can be a double-edged sword, say, when conditions on the Mississippi River system make it impossible to ship grain to Gulf exporters, keeping bins full.

Spring flooding can be a trigger for this, and so can farmers. When growers are busy, as they are now, a premium may be needed to convince them to focus on moving grain. The opposite can be true at harvest, when the pipeline fills with plentiful new crop supply.

Shipping costs for fuel, rail cars, barges or trucks also factor in, varying by the mode, origination, and destination. Diesel, as you already know, is expensive, but maybe a little cheaper than last year on the spot market, depending on whether delivery comes from a terminal or through local middlemen. And ag demand is an important swing factor for fuel demand in the spring and fall. Rail shipping varies between short-lines and those providing unit trains – both are a little higher this spring than in 2023.

Barge rates are considerably cheaper year-to-year, but that too is a double-edged sword. Corn shipments so far this marketing year are up a third, but total sales, including the number still unfulfilled, are down, with total exports off by some 44%. The opposite patterns are true for soybeans, but to a lesser extent – around 9% to 12% respectively. As a result, wait times for barges locking through on the Mississippi system are fairly small, also reducing costs, though low water remains an issue restricting tow size on the southern end of the “Big Muddy.” Few locations to the north are at or near flood stage, with the latest Drought Monitor noting dry conditions in Iowa, and parts most other states to the south and west.

Corn bids soft

Nationwide basis sums up these variables. Average nearby bids for corn, as measured by the U.S. Corn Price and U.S. Soybean Price indexes show corn basis around 3 cents weaker than average while soybeans are three cents stronger. These reflect overall supplies, which in turn are affected by 2023 production and demand so far in the marketing year.

Usage data comes out just four times a year, with publication of Quarterly Grain Stocks, which notes this “disappearance.” March 1 corn inventories are up 13% from last year and the highest since 2021, helping explain weaker basis. Soybean inventories were up 9%, but were lower than 2022. Both could change depending in part of what happens with Brazil, where harvest of the big second corn crop is underway and soybeans are flying off the shelf, bound for China.

Who owns remaining U.S. inventories is also important, which also varies by region. March 1 on-farm stocks of both corn and soybeans were up 24% nationwide, while off-farm supplies were down 1% for corn and 3% for soybeans.  This means less of the grain may have been in the “strong hands” of commercial hedgers, while more was owned by farmers and likely unhedged, potentially flooding the market at some point. This could be sooner, when planting is done, or later, like at the end of the marketing year Aug. 31, when bins are cleared to make way for harvest.

Regional differences are worth noting too. Almost all states had more of their inventories on farm than a year ago, with most at least up 5% and some corn states like North Dakota more than 13% higher. But increases were smaller on the edges of the Corn Belt. The percentage of total Ohio corn stocks on farm was only 2.6% higher with Michigan 2.4%, Minnesota 2% and Nebraska 3.8%.

Soybean increases topped 14% in Michigan and Kansas but percentages on farm were down in North Dakota, as rotations gyrated.

Delivery questions

Another metric worth watching is stocks of grain in deliverable locations and totals actually registered for delivery – that could be put on during the May delivery cycle, which runs May 1-16. Supplies at the start of last week in deliverable locations were up year-on-year: soybeans by two thirds and corn more than double and late in the week more were coming in than shipped out too.

Amounts registered had difference dynamics, though that can change in a hurry. Only 10 lots of corn were registered as of late last week, with 499 for soybeans along the Illinois River.

Those holding May positions have steadily wound down the positions in April after they peaked following the roll to March, with around 350,000 open in soybeans and near 650,000 corn. Open May corn interest fell to 140,606 at the start of trade Friday, seven times the level last year. For May soybeans, the 78,428 open were three-and-a-half times greater.

First notice day on April 30 and the start of deliveries the following day may not be the only story in the markets. Those days coincide with the upcoming meeting on monetary policy at the Federal Reserve, which could affect both sentiments overall as well as the cost of holding grain.

While the Fed is widely expected to hold its target for benchmark short term Federal Funds steady in a range from 5.25% to 5.5%, both the central bank’s statement and comments at the press conference of Chair Jerome Powell could spark market volatility in stocks, bonds and currencies that spills over to corn and soybeans. Persistent inflation shows little sign of cooling rapidly, if at all, though corporate earnings of big companies remain upbeat.

An unexpected rally in grains may be the start of pricing opportunities, but downdrafts shouldn’t be ignored either. These could strengthen basis for both old crop and new, and lower the cost of call options, for those interested in buying this price insurance.

So lots to watch, whether you’re sitting in an office or in the cab of a tractor this busy time of year.