
3 key factors for farmers focused on profit3 key factors for farmers focused on profit
Wild markets and tariff tiffs offer key farmer lessons: Pay attention to fundamentals and focus on profit – not price. For pricing opportunities, pay attention to the weather, global supplies and production, especially in South America.

The biggest lesson in the tariff tiffs may be this: focus on the fundamental lessons of farming.
“From farmers’ standpoint, you don’t want to be reactionary, and you don’t want to base your marketing plans on something that’s outside your control,” says Matt Bennett, an Illinois farmer and co-founder of AgMarket.Net, an agricultural broker and consulting firm.
“Whether you like Trump or not, this is a negotiation,” Bennett says. “We don’t know what’s going to happen. It’s a very fluid situation. Threat of tariffs and the implementation of tariffs are different things.”
The weekend’s wild ride offered a real-time study for speakers at AgMarket.Net’s annual conference, where the message was “Farming for Profit, Not for Price.” First President Trump ordered tariffs on imports from Canada, China and Mexico, sparking a steep grain futures selloff once markets opened Sunday night. By the close of trading Monday, grain prices had rebounded sharply following reports the U.S. and Mexico agreed to pause the tariffs for a month.
Monday’s market recovery lifted corn futures back near or slightly above the psychologically important $5 per bushel level (July futures closed near $5.03). But it’s unclear how trade negotiations will play out, and Bennett cautions against getting locked into a “$5 mentality.”
“Profit is a function of that price, but it’s just part of it. You have to look at your profit per acre” and other financial factors, he says. “Prices don’t pay the bills. Profit does.”
Here are three key factors for farmers focused on profit.
A world “awash in soybeans”
Despite the market’s upswing Monday, veteran analyst Dan Basse’s longer-term outlook for grain prices is decidedly bearish, largely because “the world is awash in soybeans.”
“U.S. soybeans are looking for demand,” Basse says. “We just don’t have a demand driver for U.S. beans.”
Additionally, Basse points out that trade wars “are never bullish.”
“If a trade war produces some kind of deal that leads to better grain demand, that’s fine,” he says. “Otherwise, I don’t see how tariffs build confidence in the U.S. or build demand for ag products.”
Basse says China can’t be counted on to be as big a customer as it has been.
“If we don’t have China taking ever-more amounts of grain, we need someone else to step up,” Basse said. “Mexico has helped a little with its corn purchases. But that demand seems to be drought-related, not a structural shift in their long-term corn needs.
Basse says “another ‘Phase 1’-type of agreement with China,” such as the deal that followed the 2018-19 trade dispute, could be a market changer. “But China doesn’t seem to need that this time,” he says. “Chinese farmers are now losing money producing corn. If China’s farmers are losing money that’s probably a reason why China doesn’t need corn.”
A sustained rally in corn or soybean prices is unlikely barring a weather calamity, such as a major drought in the U.S., or disruption in the Black Sea region, Basse says.
Summer drought a risk for Midwest
U.S. farmers should brace for a possible repeat of the extreme heat and dryness that stressed Midwest crops late in summer 2024, according to Eric Snodgrass, principal atmospheric scientist at Conduit, which develops software for managing agriculture weather risk.
The odds of a hotter- and drier-than-normal 2025 summer for the central U.S. are about 60%, Snodgrass says.
“There are enough boxes being checked that justify the need for discussion about drought risk this summer,” he said. “It’s not slam-dunk forecast, and we could still have good yields. But any sort of risk like this should be considered.”
Snodgrass says a handful of factors and phenomena that raise prospects for excess heat and dryness this summer appear to be converging.
For one, drought last fall sapped soil moisture across much of the central U.S., resulting in unusually low Mississippi River levels. Additionally, with the extreme cold in January and lack of substantial snowfall, soil moisture deficits are lingering. Several Midwest states had near-record dryness in January.
Other things to keep an eye on include a “borderline” La Nina effect, which has been associated with drought in the southern U.S. Perhaps the key indicator to watch is water temperature changes in the Gulf of Alaska, Snodgrass says. Colder water temperatures would signal weakness in the jet stream that would pull cold waters to the West Coast and signal heightened drought prospects in the central U.S.
If the Gulf of Alaska water is warmer, that would indicate the jet stream will sustain its usual strength, reducing the chances of Midwest drought.
Reasons to be bullish on soybeans
Brian Splitt, also a co-founder at AgMarket.Net, provided a bullish counterpoint on the soybean market. He noted that speculators recently turned bullish, with commodity funds shifting to a net long position in futures.
Soybean price charts also are flashing bullish technical signals, Splitt says, and the market appears to have priced in an outlook for ample supplies. U.S. soybean plantings may also decline as farmers plant more corn this spring.
“Momentum is firmly to the upside for the near-term,” Splitt says, referring to soybean futures. “The market has known we have a lot of beans for a long time. Something changed in January when funds decided to get long soybeans.”
Soybean fundamentals, he notes, “are not bullish.”
“But something’s changed where funds now want to own the market,” Splitt says. “Maybe the South American crop isn’t as big as we think.”
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