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Plan ahead with corn price targets

Ag Marketing IQ: Recovery rallies can come and go quickly. Get your orders in place.

Naomi Blohm

January 25, 2024

3 Min Read
Farmer holding ear of corn and calculator
Getty Images/ChatkarenStudio

“If only December 2024 would get back to $5 again, I’d pull the trigger and make some new crop sales.” This is a sentiment I’ve heard from many farmers.

Corn carryout hangover

After the January USDA report, corn prices have fallen lower. The USDA put a nail in the price coffin with 2.1 billion bushel carryout plaguing corn prices.

Looking forward, even with a slight reduction in planted acres in 2024, 2 billion bushels for corn carryout will likely linger throughout the remainder of 2024, barring a dramatic weather issue this summer in the United States.

Watch our competitor’s weather

The good news is that most of that negative price sentiment has likely been priced in for the short term in the aftermath of the January USDA report. And, since we are in the futures market, trade is already beginning to look ahead to the weather in South America and their corn production.

As I discussed in last week’s blog, there is no room for error for corn production in Brazil in the coming weeks and months.

Therefore:

  • In the short term, the futures market will likely eagerly respond to any whispers of poor weather in Brazil or Argentina with a price recovery bounce.

  • Be ready with cash price targets higher, to take advantage of any rally reaction due to perception of poor South American weather.

You know how it goes, a weather scare in South America might push the corn market higher, but then any glimmer of actual rain on the radar can sink prices quickly.

Set a price target

Looking at a December 2024 corn chart, it does seem realistic from both a technical and fundamental perspective that prices can go back up to the $5 area, before hitting major overhead resistance.

Dec_2024_Daily_Chart_with_$5.00_resistance.png

Consider calling your local grain elevator or ethanol plant to get an order working in conjunction with that price target in mind.

History has shown us that rallies can occur quickly, and end abruptly, with prices only hitting a target upside price for just minutes of one trading day. Those who have their orders placed ahead of time are implementing strategic marketing.

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

Disclaimer: The data contained herein is believed to be drawn from reliable sources but cannot be guaranteed. Individuals acting on this information are responsible for their own actions. Commodity trading may not be suitable for all recipients of this report. Futures and options trading involve significant risk of loss and may not be suitable for everyone. Therefore, carefully consider whether such trading is suitable for you in light of your financial condition. Examples of seasonal price moves or extreme market conditions are not meant to imply that such moves or conditions are common occurrences or likely to occur. Futures prices have already factored in the seasonal aspects of supply and demand. No representation is being made that scenario planning, strategy or discipline will guarantee success or profits. Any decisions you may make to buy, sell or hold a futures or options position on such research are entirely your own and not in any way deemed to be endorsed by or attributed to Total Farm Marketing. Total Farm Marketing and TFM refer to Stewart-Peterson Group Inc., Stewart-Peterson Inc., and SP Risk Services LLC. Stewart-Peterson Group Inc. is registered with the Commodity Futures Trading Commission (CFTC) as an introducing broker and is a member of National Futures Association. SP Risk Services, LLC is an insurance agency and an equal opportunity provider. Stewart-Peterson Inc. is a publishing company. A customer may have relationships with all three companies. SP Risk Services LLC and Stewart-Peterson Inc. are wholly owned by Stewart-Peterson Group Inc. unless otherwise noted, services referenced are services of Stewart-Peterson Group Inc. Presented for solicitation.

About the Author(s)

Naomi Blohm

senior market adviser, Total Farm Marketing by Stewart Peterson

Naomi specializes at helping farmers understand how to manage cash marketing needs and understand the importance of managing basis, delivery point considerations, cash flow needs and storage capacity. She earned her Bachelor of Arts in Political Science with a minor in Agriculture Business at the University of Wisconsin in Platteville. She has a Master of Science in Adult Education with an emphasis in Ag Economics from the UW-Platteville and a Master Certificate in Global Education, from the UW-Oshkosh.

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