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Will grain markets find summer love?

Ag Marketing IQ: June rallies aren’t a sure thing as corn and soybeans hit the turning point for the 2024 season.

Bryce Knorr, Contributing market analyst

June 3, 2024

4 Min Read
commodity markets
Алексей Белозерский/Getty Images

The summer solstice is still a few weeks away. But for ag traders who aren’t druids, the season began June 1 – the start of meteorological summer. It’s no mere date on the calendar and can mark a key turning point for corn and soybeans.

New crop futures and options are following seasonal trends suggesting buying opportunities ahead of whatever weather rallies emerge in coming weeks.

Relative option costs are below average. If the market takes off, that insurance with calls to protect sales in particular could get prohibitively expensive. That’s no guarantee, of course, but it merits a look depending on your marketing plans.

FOMO for futures

Using call options to cover either sales already on the books or those you hope to make provides another kick at the can to help reap a higher net selling price. Calls convey the right – but not the obligation – to buy futures if you want, so these contracts gain in value the higher prices go, at least in the short run.

Earning a profit on calls likely will take a fairly noticeable run up in futures. The calls could also be more valuable if traders get FOMO and rush to buy them, say if forecasts turn hot and dry.

The value of an option mostly depends on three factors:

  • How long it has until expiration

  • the strike prices it conveys to purchase futures

  • implied volatility – the market’s “fear” gauge, which can double, triple or increase even more during a particularly wild weather market.

Options running through harvest 2024 covering December corn and November futures still have significant time value until expiration, but this metric will begin to erode fairly quickly in the last 60 to 90 days of their life. Corn and soybean implied volatility is also fairly cheap comparatively, in part because futures also are weak. With no weather threat on the horizon yet, prices sold off after Memorial Day, which is par for the course.

When the calendar flips to June, futures on average start to pick up. Both corn and soybeans turn higher, though they follow slightly different patterns.

June corn rallies

Corn prices typically weaken into Memorial Day, when the crop most years is emerged and off to a decent start unless delayed by weather conditions that aren’t typical. Slow planting in the first two weeks of May this spring spurred large speculators to rush and finish buying back bearish bets built up following harvest last year as large inventories hung over the market. That short covering began in March on hopes a cutback in acreage this spring and forecasts for a summer La Nina event could whittle away at stocks.


But June rallies aren’t a sure thing. They occurred by some measures just half the time over the past 50 years. Such rallies began fading by the middle of the month as six-to-10-day and two-week forecasts started peaking into the window for pollination.

That make-or-break process normally gives buyers confidence to wait for bargains at harvest, while causing sellers to jump in to get a better price than available off the combine. Big years, like 1988, 2008 and 2012 distort the average futures price to the upside, when rallies can top $1 or even $2 a bushel.


Implied volatility in December corn options follows a similar trajectory. Volatility for calls normally is more than for puts at first because those wanting to own corn face more urgency to get coverage. When futures turn south, volatility between the two types of options flips. At some point, downside protection becomes important for those needing to make sales.Implied volatility for new crop corn was cheaper than average as summer 2024 began, running under 25% compared to an average of about 30%, which is where it was a year ago when weather concerns began to build. This fear factor sold off when July 4th market fireworks fizzled. It rebounded sharply higher in mid-July, thanks to a helping hand from corn’s rotation partner.

July soybean peak

Soybeans normally trade arm-in-arm with corn, with a few twists during the growing season. Abnormally late corn progress in some years raises fears that acres farmers can’t get in will shift to soybeans after the prevent plant crop insurance deadlines pass.


July also can bring soybean rallies, due to the later reproductive cycle for the oilseed. November futures on average are higher in mid-July compared to Memorial Day about 55% of the time. That includes 2023, when prices topped $14 and 2012, which brought $17 beans in July.

But this Memorial Day projections for very comfortable stocks kept volatility under a blanket. At 18.5%, volatility was around 3% below average. This didn’t turn options into penny stocks. November at-the-money calls still cost around 60 cents a bushel, with puts at more than 48 cents, or $2,400 for a 5,000-bushel contract. Still, value, as with beauty, is in the eye of the beholder.


The question now is whether more traders will be smitten. A sell-off in the stock market likely didn’t help love bloom last week, though crude oil production cuts from OPEC and its allies could rekindle a few flames in commodities.

Will the hit song on the radio this summer be “Sweet Summer Lovin’” or “See You in September”? Stay tuned.

About the Author(s)

Bryce Knorr

Contributing market analyst, Farm Futures

Bryce Knorr first joined Farm Futures Magazine in 1987. In addition to analyzing and writing about the commodity markets, he is a former futures introducing broker and Commodity Trading Advisor. A journalist with more than 45 years of experience, he received the Master Writers Award from the American Agricultural Editors Association.

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