Weigh Storage Costs Against Cash Sales at $4 Corn and $10 Soybeans

With USDA projecting record crops, farmers face tough choices on whether to store or sell. Strong demand and disease concerns may offer price support, but weighing storage costs against cash sales is key this harvest.

What Happened in the Market

The August Supply and Demand Report was extremely bearish on corn. Acres increased from 86.7 to 88.6 million, and yield potential rose from 181 to 188.8 bushels per acre since the July report. Those numbers created a jump in ending stock for the upcoming crop: 2.11 billion bushels, up from 1.66 billion last month.

The market dropped to $3.92, putting in a near term low, and consolidated near the $4 mark in December futures before finding support and pulling through the 40-day moving average of $4.14 on strong demand. 

They say low prices cure low prices, which brought about a recent uptick in purchases of U.S. corn. 

USDA lowered soybean acres from 82.5 to 80.1 million acres, while raising yield from 52.5 to 53.6 bushels per acre. That lowered potential ending stocks from 310 in July to 290.

Demand remains uncertain with the absence of China due to trade concerns. Soybeans managed an impressive rally back to the $10.60 area at the time of this writing with overhead resistance at summer high $10.74 put back in June. 

From a Marketing Perspective

Thanks to ideal weather and few drought concerns, a record crop has been expected throughout most of the summer. However, the recent Pro Farmer Tour pegged yields a bit lower than USDA, citing disease concerns, such as sudden death syndrome in soybeans and southern rust in corn, potentially lowering yield. That has also provided support under prices, and we may have seen the low until more is known at harvest. 

December corn has a gap on the chart near $4.32 that was left in early July. This should be a price target to consider cash sales. Producers could look to add new crop beans sales at $10 cash and reward the recent rally. It may be hard for November prices to get past $10.75 unless China demand improves. There are still large crops out there for corn and soybeans, plus a large world supply. Sellers should be aware and reward rallies that could be here one minute and gone the next. 

Prepare Yourself

As harvest approaches, consider the cost of storage and weigh the benefits of making cash sales and re-owning with calls for a post-harvest rally. It appears December corn futures should hold support near $4 with resistance at $4.15 and $4.30, while soybeans likely will trade between $10 and $10.75, barring a lack of a trade deal with China. 

If you choose to store, consider selling out-of-the-money calls in May or July to help pay for the cost of storage, and sell the carry in the market. It may be a good idea to start looking at hedging for next year with Nov. 26 soybeans near $10.80 and Dec. 26 corn above $4.50. 

If you have questions, email Cathy at  or visit TotalFarmMarketing.com for more information. 

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