August Weather is Critical

What’s Happened…

During a growing season, there are critical stages. One of the more important is ear-filling for corn and pod development for soybeans. In a typical year, most of the Corn Belt is well on its way to determining crop size by the third and fourth week of July. August weather, if conducive, will add weight and ultimately bushels, resulting in a good crop. Adverse weather could reduce yield, resulting in a poor crop. For soybeans, since early planting is more the norm in recent years, late July weather is more important to crop development than it was 10 years ago. Early August is where the rubber hits the road. Either there is enough moisture to fill pods, or not.  

The bottom line is that it takes good conditions to finish crops. Hot temperatures in July (like this year) may have had an impact, yet it should not be a surprise if early August rains, should they come, produce better yields.

Why this is Important…

In 2024 and 2025, corn futures prices reached their yearly low in August. The 2026 December corn futures low so far this season occurred on June 30 at $4.25-3/4. Due to challenging weather through mid-summer, crop ratings have declined and are lower than the past two seasons for this same time. Many believe the low price for the year is in place. While that could be the case, we wouldn’t necessarily bet on it. After exceeding $12.50, soybean prices have retreated to under $12.00. If downward momentum builds due to increasing crop prospects, futures could target $11.00 or lower. Producers should consider taking advantage of the recent price rally. It’s easy to think that prices will only go higher. Ask yourself a simple question: What if the corn and soybean crops are larger than currently forecast? Good marketing strategies prepare for all scenarios.

What can you do about it?

Strive for a balanced marketing approach. Be prepared for prices to move lower than expected. At the same time, it is fair to suggest that both crops have had a lot of challenges this year. This is reflected in crop conditions, which have declined during July according to the USDA’s Weekly Crop Progress and Ratings report. Take action. Doing nothing is still a decision and will have consequences, both good and bad. A better approach is to prepare yourself through strategy.  

A balanced marketing approach considers taking the opportunity to forward sell and cover or re-own with call options. Buying puts protect the value of unpriced expected production. Trying to outguess the weather for the weeks ahead may be futile. Managing price volatility is something you can do.  Have critical conversations with the members of your success team. These include family members, lenders, and others. Most important is a conversation with your market advisor.

Find out what works for you… 

Work with a professional to find the strategy or strategies that are best suited for your operation. Communication is important. Ask critical questions and garner a full comprehension of consequences and potential rewards before executing. The idea is to make good decisions for the operation and less emotionally–charged responses to market moves, which are always dynamic.   

About the Author: With the wisdom of over 36 years at Total Farm Marketing and following across the Grain Belt, Bryan Doherty is deeply passionate about his clients, their success, and long-term, fruitful relationships. As a senior market advisor and vice president of Brokerage Solutions, Doherty lives and breathes farm marketing. He has an in-depth understanding of the markets and marketing tools, an excellent listener, and communicates with intent and clarity to ensure clients are comfortable with their decisions.

The data contained herein is believed to be drawn from reliable sources but cannot be guaranteed. Individuals acting on this information are responsible for their own actions. Commodity trading may not be suitable for all recipients of this report. Futures and options trading involve significant risk of loss and may not be suitable for everyone. Therefore, carefully consider whether such trading is suitable for you in light of your financial condition. Examples of seasonal price moves or extreme market conditions are not meant to imply that such moves or conditions are common occurrences or likely to occur. Futures prices have already factored in the seasonal aspects of supply and demand. No representation is being made that scenario planning, strategy or discipline will guarantee success or profits. Any decisions you may make to buy, sell or hold a futures or options position on such research are entirely your own and not in any way deemed to be endorsed by or attributed to Total Farm Marketing. Total Farm Marketing and TFM refer to Stewart-Peterson Group Inc., Stewart-Peterson Inc., and SP Risk Services LLC. Stewart-Peterson Group Inc. is registered with the Commodity Futures Trading Commission (CFTC) as an introducing broker and is a member of National Futures Association. SP Risk Services, LLC is an insurance agency and an equal opportunity provider. Stewart-Peterson Inc. is a publishing company. A customer may have relationships with all three companies. SP Risk Services LLC and Stewart-Peterson Inc. are wholly owned by Stewart-Peterson Group Inc. unless otherwise noted, services referenced are services of Stewart-Peterson Group Inc. Presented for solicitation. 

Author

Bryan Doherty