Corn: Sell or Roll

What’s Happened…

In years of little profit and tight margins, producers are faced with many challenging questions. One that comes up frequently is whether to deliver against contracts (basis or price later) or to roll these contracts to a deferred month. For many, this exercise might be routine, yet it is still good to review some of the pros and cons that may impact decision-making.  

The year 2025 didn’t offer much forward contracting opportunities. This fall, many farmers found themselves blessed with big production numbers, yet little crop sold in advance. Basis contracts became popular when futures prices were low in late summer. The question now is what to do as end-of-month deadlines are approaching. 

Why this is Important…

Navigating through myriads of the potential marketing decisions can be daunting. Yet decisions must be made. Sometimes decisions are easy, what one might term a no-brainer. These are decisions that, even with hindsight and no matter what might happen, are still good decisions. Most of us (humans in general) dwell and fret when we make decisions in a situation with no clear picture or bias for which way prices may move. That could be the case in the current corn market, where prices have mostly traded in a sideways pattern for multiple months.  

History would suggest prices tend to factor in uncertainty for the upcoming year, as well as weather developments in the Southern Hemisphere over the next several weeks and months. Therefore, storing grain may make a lot of sense. On the other hand, the most recent forecasts for the Southern Hemisphere suggest both near-term and longer-term weather outlooks appear to be beneficial for production. Demand for U.S. corn has been vibrant with excellent export sales year to date. Perhaps the most important will come on January 12 when the USDA WASDE report will estimate yield for the last time on the 2025 crop. There are many who believe the current yield at 186 bpa (bushels per acre) is too high. Adding acres this past year and expecting yield to be above a record high of last year’s 179.3 bpa might yet prove that support for higher prices is warranted. 

What can you do about it?

It might be argued that the decision process in a low volatility market can be just as challenging (if not more) than when prices are rapidly moving. There’s an old saying; “never sell a quiet market.” So, back to the question, roll or sell? Decide what risk you want to take. Calculate the cost of rolling contracts, both in actual charges and opportunity cost of money tied up with stored corn. Additionally, calculate an intangible – the level of stress are you willing to incur. Bring into the equation multiple strategies with the pros and cons of each.  

If the risk (both the cost to roll and market price fluctuation) and stress levels are manageable for you and delivery logistics (if any) are not a concern, then consider rolling. If this risk is too high, then consider selling. Are tax consequences important? If selling, should you buy call options?  

There probably isn’t a best strategy. Best is always relative to something. Most all strategies have “gray areas,” suggesting the outcome is dependent on where and when the market moves. Planning and preparing may be your best approach so that you are ready to execute with an intentionally well thought-out strategy. 

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, a strong 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.

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Bryan Doherty