Why 2025 Corn Prices May Rally

What happened

The 2025 December corn futures contract, as of this writing, is trading near $4.40. The December 2024 contract is trading near $4.14. In theory, this implies that the market is only going to pay farmers 26¢ to hold corn in storage for one year. That does not seem logical. Perhaps more importantly, there seems to be very little financial incentive for farmers to plant corn in 2025. 

Unless corn prices rally, we anticipate that farmers will likely reduce acreage, just as they did for the 2024 season when acres were reduced by 3.9 million. If another 2 million acres are lost in the year ahead, that would be a loss of nearly 6 million acres in two years. The projected global supply for 2024 is expected to be consumed, implying a slight loss in world ending stocks which have remained mostly unchanged over the last 4 years.

Why this is important

December 2025 corn futures trading near $4.40 is bringing value to end users both domestically and worldwide. At the same time, it’s not bringing value to producers whose cost of production is higher than the market is currently offering. In a sense, it is like a flashing neon light telling end users to buy. Realistically, will corn prices decline enough over the next year to justify buyers’ risk of doing nothing now? Probably not.

The old saying is: “Nobody cares about your cost of production.” Corn farmers hear this all the time. And while that may be true, the market will likely, at some point, care about all corn producers’ cost of production. If an industry is financially challenged, this could result in lower production. The price of corn would need to rally to incentivize producers to plant more acres. Either way, it is an argument for higher prices.

What can you do?

Buyers of corn should be on high alert to lock in longer-term needs. If producers or elevators are not interested in writing contracts that far out, use December 2025 futures contracts. Now is the time to plan and execute. Many will ask, “What if prices go lower?” 

The best answer might be to buy more. Corn prices relative to recent history and the cost of production are considered a value. We’ll define value as the ability to buy corn at or below what it costs to produce.

Corn producers should remain patient. There are two growing seasons in front of the December 2025 contract, the Southern and the Northern hemispheres. Year-to-date exports have been strong. Currently, December 2025 prices are likely to work for all demand segments. Yet, it is important to set target points at higher prices to sell. Consider buying call options post-harvest 2024 for the 2025 crop. If prices hit your targets, sales will be made on a rally with re-ownership already in place. Too often, rallies come and quickly disappear. Discuss with your adviser how to implement this approach so you can choose the best tools for your operation.

Find 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 rather than emotionally charged responses to market moves, which are always dynamic.

Editor’s Note: If you have any questions on this Perspective, feel free to contact Bryan Doherty at Total Farm Marketing: 800-334-9779.

Disclaimer: 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 the 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.

About the Author: With the wisdom of 30 years at Total Farm Marketing and a 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 tools and markets, listens, and communicates with intent and clarity to ensure clients are comfortable with the decisions.