Farmers looking to better market their corn, cotton, soybeans, and wheat in 2024 need to remember that commodity prices tend to be higher at planting time and lower at harvest. It’s a matter of supply and demand. 

Scott Mickey, farm business consultant at Clemson University, explains that prices tend to be highest at planting time “because we are trying to encourage planting, encourage more production, trying to increase our supply, so we typically see a price rally from first of the year into planting time.” 

On the other hand, Mickey said supply is largest during the months of harvest, thereby prices on average tend to be lowest at harvest. He said this is important for farmers to consider when they are pricing their corn, cotton, soybeans, and wheat. 

He said these seasonality principles tend to apply more to corn and soybeans and less so to cotton and wheat. There is less seasonality for wheat because wheat is harvested throughout the year around the world. 

“It’s cotton that I’m really confused on because the low has been in August. We look at April versus August since 2013, we’ve been about two cents better in April than we have been in August,” Mickey said in a marketing session at the North Carolina Commodity Conference Jan. 12 at the Sheraton Imperial Hotel in Durham. 

“The seasonality is not quite as strong on wheat and cotton, but it is very strong on corn and soybeans,” Mickey said.  

Corn

“When we look at corn, you can see since 1986 the average price in October has been 18 cents a bushel less than the average price in May. If you look since 2013, the average price in May has been 38 cents higher than the average price in October. It has happened four out of five years; 80% of the time, the average price for corn in May is higher than the October price,” he said. “As we move into planting season, those should be the opportunities you look for to make pricing decisions.” 

He said 38 cents more per bushel equates to $60 per acre more revenue per acre if you’re making corn yields of 150 bushels per acre. “Historically May is a better time to price than the rest of the year.” 

In June, the price for corn is actually 40 cents higher than in October. Mickey said this has been the case four out of five years. “If you haven’t made any pricing decisions by June, you really have to have something fundamental going on because typically prices in May or June are going to be the high for the year, and then they are going to fall down during the harvest period.” 

Soybean

“The months that come into play are actually June and, and that has a lot to do with the weather. It’s not quite as consistent. It’s about three out of five years. But the price difference is 49 cents a bushel more in  June versus the average price in October. For July, it’s 29 cents higher than it averages in October.  This is something for you to keep in mind as you go through your marketing decisions,” Mickey said.  

Mickey said having a written marketing plan and understanding how much revenue your operation needs to cover family living expenses, cover operating expenses, and to service your debt is critical. 

“Knowing what those prices are for each of your crops gives you a better ability to take advantage of the pricing opportunities when they arise. I think the second thing we have to have is a plan of action. We say we’re going to write a marketing plan for 2024, but in reality, I think we have to write multiple marketing plans. What I like to do is write a plan for January, February, and March because we are going to have a lot more information as we move closer to planting to see what direction prices are likely to move in 2024,” Mickey said. 

“What I would encourage you to do is to write a plan of what you are going to do at different price points as you look at 2024 marketing for the crops you are growing.” 

Mickey said it is critical to monitor your plan because sometimes you set pricing objectives as commodity prices move up, but you don’t have a plan if prices are going down. 

“The plan is no good if you don’t execute. If you say you’re going to sell corn when it gets to $5.25 cents per bushel, you have to execute. The hard part about that is when it gets to $5.25, we think it’s going to $5.30. So, unless you are selling all of your corn at $5.25, you do want it to go to $5.30. But go ahead and sell some of it at $5.25 and hope that’s the lowest you do all year long.”