The 2023-24 crop year for grains ended on Aug. 31. As always, this past year provided many surprises. Now is an excellent time to highlight some marketing lessons from 2023-24 and look ahead to the continued implementation of a comprehensive risk management strategy for 2024-25.

Here are five marketing lessons learned in corn and soybean during 2023-24 that we can apply to this new year.

Markets do not always fill “gaps”

After closing at $5.03½ on Dec. 29, 2023, December 2024 corn futures “gapped lower” to finish at $4.98¼ on Jan. 2, 2024. After drifting lower in January-February, the contract recovered. Many market observers discussed selling corn when December futures “filled the gap” at $5.03. The contract did edge higher into mid-May, trading as high as $4.96¾. However, with good early growing conditions, December futures never closed above $5. This is a prime example that filling “gaps” does not always occur.

Be prepared for market reaction to a USDA Report

The USDA’s June 30 Acreage report was expected to show only a slight increase in 2024 U.S. corn acres from March. December corn futures traded near $4.40 just prior to the report. The report, however, pegged acres 1.5 million above the March estimate, and futures immediately fell 20 cents. While trading has been choppy, the market has faltered ever since. This serves as a reminder to be prepared for market reaction to a USDA report, rather than react to the numbers.

Change happens quickly

2024 soybean futures rallied from $11.59½ on April 30 to $12.28 on May 7 on crop concerns. However, a change to favorable planting weather stalled the rally, and November plummeted to $11.64 by June 3. A “weather rally” in June-August and November futures never occurred. Prices fell below $9.60 two weeks ago. Weather rallies are not guaranteed; change happens and can be very fast. Those executing a disciplined risk management strategy can better manage increased price volatility.

Utilize risk management tools

As noted above, November 2024 soybean futures reached a spring high well before the heart of the 2024 growing season. This is an important reminder that getting control of bushels prior to harvest by utilizing risk management tools that provide upside opportunity—and downside price protection—is a key to successful marketing. 

Monitor closely what happens in South America

A year ago, widespread drought in Argentina took the corn crop size down more than 30% from the year before and helped boost corn futures above $6 during the summer of 2023. This year, however, is a much different story as Argentina's corn production is forecast at 51.0 MMT—42% above last year. Argentina is set to provide fierce competition to U.S. corn exports in 2024-25, with corn futures below $4.

What happens in South America has never been more critical to U.S. agriculture than it is today.

Now is an excellent time to plan ahead and implement a comprehensive risk management strategy for 2024-25.

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