Corn is facing a “weather premium”

Right now most of you have your corn in the ground. When the price goes up this time of year, it is usually because traders fear the weather will not be good for growing.

It is called “weather premium” and a University of Illinois ag economist defines the term.

Joe Janzen states, “The historical data shows that prices tend to be higher. They deviate about the harvest time price by, on average, about 12 percent, but the range of outcomes, again, is wide. Sometimes the market can be 50, 60, to 70 percent higher than it is at harvest, right now during the growing season, but sometimes it can be 30 to 40 percent below where it ends up being at harvest.”

Historically, early June can be the highest pre-harvest pricing opportunity, but not always.

Janzen suggests getting some sales in the books and the opportunity to deliver at harvest. He says do not sell everything, as you want several tools in your toolbox.


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