Pay Attention to 2027 Opportunities

What’s Happened…

A recent price rally is providing an opportunity to market 2026 corn, soybean, and wheat crops. Additionally, 2027 futures for all three commodities are offering an opportunity to start marketing for next year. Prices have moved to levels not seen in the three years. Rising input costs coupled with low and stagnant commodity prices since 2023 have financially challenged farmers. Looking forward, 2027 prices are offering value, providing a more positive financial outlook well in advance of the planting season, something that has been missing for producers in recent years. December 2027 corn futures trading near $5.30, November 2027 soybeans over $12.00 and July 2027 Chicago wheat over $7.50 are levels high enough to initiate sales at what are likely positive returns on those bushels.

Why this is Important…

Price rallies can occur for many different reasons. Usually, it is due to reduced supplies. As supplies decline and perceptions of weather or other elements that might affect future supplies take focus, prices tend to ration inventory by moving higher. When this occurs, a potential dilemma for producers occurs as to when and how much to sell. A rule of thumb that may be helpful is to sell between 25% and 35% of your expected production based only on price. Dismiss the daily market chatter of what the market is doing and where prices may go. Sell ahead when price levels work for the operation. This may look different to each farmer, yet a return on investment of greater than 10% may be a good starting point. 

The litmus test, after the year is over, is that no matter where prices may have eventually moved to, those early sales made sense and are defendable. History would suggest that, due to a high level of production certainty, early sales could be some of your best sales. If not, that means you benefitted from the 65% that was unpriced.

What can you do about it?

Monitor the market carefully. Work closely with your advisor. There are different methods to enter sales. One is to set price targets. If the market hits these, you become a seller. The orders are working so you don’t have to watch the market. When prices get close, avoid canceling orders, even though it will be tempting as the market looks strong. Staggering price targets at various levels keeps you from an all-or-nothing selling approach. 

If prices are moving higher and you don’t want pre-determined price levels, you could follow the market with sell points below the current market price. The idea is that you are not selling until the market “tips over,” a signal that weakness may lie ahead. This method will likely require you to raise your trigger points (called “sell stops” in the futures market) to keep up with the price rally. The key is to have the discipline to change orders as necessary.

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