Futures Prices

Corn Futures Drop Following Surprise Yield Increase in January USDA Report

Mon, 12 Jan 2026 18:44:22 GMT

The January USDA reports are the biggest of the season with final crop production for the previous year, world supply and demand estimates, quarterly stocks and winter wheat seedings for the new season. Average trade guesses ahead of Monday indicated only minor adjustments to the annual reports that are historically a huge market mover.

This year, all eyes were on final yields and production, specifically corn, and USDA provided several bearish surprises.

Corn Crop Still Big

USDA didn’t back off its big corn crop forecast, putting its final 2025 production at 17 billion bushels. The agency raised its final yield estimates from November to 186.5 bu. per acre. ( Ahead of the report , the trade was expecting a 2 bu. cut to 184 bu. per acre.) The gains also include raising acreage 4.5 million above the June survey, which analysts say is unprecedented. The final harvest area is now estimated at 91.25 million acres.

In January 2026, USDA released record corn yield and production numbers.

(USDA/Lindsey Pound)

The increase in production also lifted U.S. ending stocks to 2.227 billion bushels. That’s up from 2.029 in December 2025 and well above traded estimates. Corn futures markets sank double digits immediately following the release.

“That’s just a massive crop, 186.5 for yield, says Matt Bennett with AgMarket.Net. “I take issue with the higher corn yield considering the heavy disease pressure in parts of the Corn Belt.
A lot of people, of course, with recency bias and all the issues felt like [USDA] could take this yield down a fair amount. I would say it was definitely a shock for most people.”

USDA raised total corn usage to a record 16.4 billion bushels.

“Exports have been nothing short of incredible so far. As far as sales are concerned, we’ve actually had good shipments, but USDA left exports at 3.2, and then actually took up feed and residual usage,” Bennett adds.

Soybean Numbers Remain Steady

On the soybean side of the aisle, USDA left yields basically unchanged from the November report at an estimated 53 bu. per acre. However it did raise overall production to 4.262 billion bushels.

USDA left soybean yields basically unchanged from the November report but did raise overall production.

(USDA/Lindsey Pound)

Ahead of the report , the average trade guess lowered yield by 0.3 bu. to 52.7 bu. per acre. Jerry Gulke thought President Trump’s goal of keeping food prices low and the fact USDA is providing Farmer Bridge Assistance might dictate a bearish slant.

Ending stocks are beginning the new year at 350 million bushels. That’s higher than December’s estimates based on smaller expected exports. The increase in production and lack of exports drove futures lower following the report.

“Essentially there were minor changes [for soybeans] other than exports, which went down 60 million bushels,” Bennett explains. “You’ve got to assume it’s because USDA took that Brazil crop up to 178. It’s something I think they lagged in doing. However, a 350 million bushels soybean carryout is still tight and with exports sales running 30% behind last year, it may be a gift for now.”

Winter Wheat Seedings Down

Farmers found a reason to plant more winter wheat than previously expected at 32.99 million acres. That’s well below last year’s crop planted on 33.15 million acres but larger than the trade had anticipated. Hard red winter wheat was nearly steady with last year at 23.50 million acres. Soft red winter wheat also near a year ago at 6.14 million acres while white winter wheat plantings fell to 3.36 million acres.

Click here to hear how Arlan Suderman, chief commodities economist with StoneX, breaks down the price action following the report.

Farmers Face Budget Squeeze And Balance Sheet Challenges—Echoes Of A Decade Ago

Tue, 30 Dec 2025 21:13:24 GMT

If heading into 2026 feels a little like déjà vu, you’re picking up the same vibes Chris Barron, president and CEO of Iowa-based Ag View Solutions, is experiencing. He believes the next couple of years will echo the last big downturn farmers weathered a decade ago.

“It’s kind of scary that 2025, ’26 and ’27 look essentially like a repeat of 2015, ’16 and ’17,” Barron says. “If you remember that time frame and made it through, buckle down because I think we’re going there again.”

He says one of the clearest signals farmers are about to experience a repeat of a decade ago is based on the 2026 cost-of-production data from Ag View Solutions’ clients, who are based in 23 U.S. states and three Canadian provinces:

Soybeans: About $11.87 per bushel based on a 65-bu. average yield
Corn: About $4.69 per bushel (before basis) on a 223-bu. average, with many growers needing at least $4.85.

Some growers raising non-GMO seed beans or getting premium contracts can still make soybeans compete. But for many farms, soybeans are the weak link in the current economic cycle.

Right now, Ag View Solutions clients are expected to plant roughly 62% of their acres to corn and 38% to soybeans for 2026 — essentially the same as 2025. Barron says he doesn’t expect many acres to shift away from this mix to more soybeans “unless something really changes.”

Given current price relationships and crop insurance guarantees, Ag View Solutions data shows about a $50-per-acre advantage to corn over soybeans for the year ahead. Even if the dollars trend lower, he says corn often pencils out better because of gross revenue and risk management tools.

More Cost Pressures Heading Into 2026

It’s no secret production costs are increasing heading into the next season. Some of the key factors include:

Overhead costs (what Barron calls ‘”return to management”) for family and employee expenses, including phones, fuel and business-paid personal expenses, are up nearly 5%. After the past year or two of what Barron describes as hard belt-tightening, he says deferred spending is “snapping back” at higher levels.

Land rents are holding mostly steady, supported by higher property taxes and outside investor demand.

Interest expense is climbing as operating lines grow.

Fertilizer costs are a mixed bag. On corn, fertilizer costs are up about 7%, even though Barron believes most farms are staying with removal-rate applications. On soybeans, he says fertility costs will be lower, mainly because growers are putting less fertilizer on their bean acres and leaning harder on corn nutrients.

Machinery and equipment costs are also inching higher for the year ahead.

This Is Not A Repeat Of The 1980s

Despite the “red” many farmers will see on their spreadsheets in the year ahead, Barron says the current period is not a repeat of the 1980s farm crisis, for two key reasons:

Farmer equity is strong. Debt-to-asset ratios remain healthy for many U.S. growers, even if cash is tight.
Many farmer exits are voluntary. Today, many farmers are choosing to retire or scale back in order to protect equity.

Barron offers a recent example: “I got a call the other day on 7,000 acres, a 45-year-old farmer saying, ‘I’m not going to do this anymore. I’ve got a $5 million equity position, and I’m not going to go for a couple more years and chew away another million dollars. I’m just going to be done.’”

Strategies for the Current Climate

To survive — and potentially thrive — in this “repeat” cycle, Barron suggests focusing on these four areas in the year ahead:

Do the high-dollar work. Barron says the “$500-an-hour” work is crunching numbers in the farm office. “Know your true costs, stress-test budgets, analyze each profit center. A few hours spent with good numbers can be worth far more than another round in the tractor,” he says.
Protect yield. He advises against cutting seed, chemistry or other inputs that protect or enhance yield “just to save a few cents per bushel.”
Right-size your operation. Barron says some of the most successful turnarounds he’s seen with operations lately have come when farmers “right-sizes” — they’re doing less, but doing it better — instead of trying to be everything to everyone.
Use collaborative models. Barron says he is seeing more farmers share equipment and labor with their neighbors to spread fixed costs without extra capital.

Opportunity Will Still Knock

During a Top Producer podcast, Barron told Host Paul Neiffer that the tight times ahead will create new land-rent opportunities for some farmers who want to expand. What commonly happens when margins get tight is some farmers pull back, and that’s when expansion possibilities open up for others.

“We’ve had numerous clients call us about opportunities to rent land and not like in small amounts. When times are tight and when things aren’t good, that’s when these opportunities present themselves,” he says.

Barron’s message for those farmers in expansion mode: have your numbers, working capital and lender relationships in order now, so if the right block of ground comes available, you can move quickly and confidently on it.

If you’re interested in the ROI spreadsheet Barron’s team uses to analyze market trends, email cbarron@agviewsolutions.com .

Hear the complete discussion between Barron and Flory on Farm Journal TV . Also, you can listen to the Top Producer podcast discussion between Barron and Neiffer at the link below:

‘Farmers Can’t Outyield the Balance Sheet Anymore’

Fri, 12 Dec 2025 22:54:51 GMT

Randy Dowdy, high-yield corn and soybean farmer and agronomic consultant, paints a stark picture of the economic pressure bearing down on American farmers.

Fresh from a visit with customers, Dowdy says the same three questions dominate almost every discussion he had with growers:

Where can we cut costs?
Where do we have to spend money to stay in business?
How do we service existing debt when margins are razor thin?

Even with strong yields this year, many of the farmers, he notes, “could not outyield the balance books.” Commodity prices have not kept pace with rising costs, he says, leaving farmers struggling to keep their operations in the black.

Costs Have Soared, Partly Due To Regulations
Dowdy contrasts his early years in farming with today’s reality. When he started farming in 2008, his first tractor cost between $150,000 and $175,000. Now, he says, a similar horsepower tractor “can run roughly three times that dollar amount.”

He traces a significant part of that escalation to emissions and environmental regulations that began ramping up in the late 2000s. He recalls an initial price jump, followed by annual increases of 6% to 8% since then, compounding the burden on farm finances. The complexity that comes with the machinery systems, he argues, also has stripped farmers of their ability to repair their own equipment.

“You can’t work on [equipment] without a computer. Even the technicians can’t work on them without a computer,” he mentioned on a recent AgriTalk segment.

Noting not all of the price jump is due to emissions controls, Dowdy believes the regulatory wave gave some manufacturers cover to raise prices.

Tension Between Policy and Reality
Dowdy’s comments on AgriTalk came following a White House roundtable on Monday tied to a new $12 billion “bridge payment” plan . President Donald Trump said his administration will move quickly to ease environmental requirements affecting tractors and other farm machinery , arguing the changes will lower sticker prices and simplify repairs.

On Wednesday more news followed with Ag Secretary Brooke Rollins and Health Secretary Robert “F” Kennedy Jr., announcing a $700 million initiative for regenerative agriculture .

Dowdy said he’s not opposed to supporting agricultural niches — all of the profitable corn and soybean growers he and Total Acre business partner David Hula met with recently have some kind of specialty angle.

“If there’s a little help for those guys, I don’t have a problem with it. But at the end of the day, the row crop farmers are where the help needs to be,” he notes.

Part of the help has to do with machinery costs. He highlighted cotton pickers as one example.

“The cotton industry’s got one manufacturer that I’m aware of that makes a cotton picker. One. And it’s $1.2 million,” he says. “Where’s the competition that helps make that thing affordable?”

Dowdy doesn’t claim to have all the answers, but he would like a “seat at the table” to have a candid conversation with policymakers and regulators focused on one core goal: bringing equipment and input costs back within reach so farmers can keep their operations viable.

“I’m all for the farmer,” Dowdy says. “If the farmer wins, everybody wins.”

Dowdy and Hula address farmer profitability needs in more detail in their new Breaking Barriers With R&D podcast, available here:

You can also catch the AgriTalk discussion between Dowdy and Host Davis Michaelson below:

As Farmers Look to Cut Costs for 2025, Machinery and Technology Could Take the Biggest Hit

Fri, 31 May 2024 16:24:27 GMT

Commodity prices have seen a bit of a rebound over the past month, but even with optimism beginning to surface with prices, agricultural economists think net farm income could fall more than expected, and the fallout could be felt with just how much farmers scale back what they purchase over the next year.

The May Ag Economists’ Monthly Monitor , a joint survey of nearly 70 ag economists conducted by the University of Missouri and Farm Journal, is one metric to help gauge the health of the ag economy. As global weather and geopolitical events continue to impact the markets, ag economists grew slightly more optimistic on the health of the overall ag economy in the past month.

“I think you can look at things like crops in South America, you know, we’ve had some disease issues in places like Argentina, we’ve had some wet weather in Brazil, some of those things, I think, have been helpful to boost prices at the same time. The wheat situation in Russia, I think, has also been important in terms of prices,” says Scott Brown, interim director, Rural and Farm Finance Policy Analysis Center (RaFF), University of Missouri.

Brown helps author the Ag Economists’ Monthly Monitor, and he says the May Monitor shows even with more optimism for some commodities, ag economists’ views on the net farm income picture slightly eroded over the past month, falling from the $117.82 billion projected in the April survey, to $110.4 billion in May.

“I think it’s important to remind ourselves, the changes happen really quickly,” Brown says. “The volatility up and down, is going to continue in front of us. So, although we generally say the trend is down, there will be opportunities for better prices in front of us at times.”

Arlan Suderman, chief commodities economist for StoneX, is one of the nearly 70 ag economists surveyed each month. He says even with the global grain and oilseed supply weather issues around the globe, his outlook on the ag economy hasn’t changed course.

“I don’t think it really has, if anything, I think it’s become a little bit more challenging,” Suderman says. “But I say that within the context. I think that the new world we’re in is going to have more challenges. But those challenges will also create more opportunities. It just means we’re going to have to be more strategic. We went through several years where you could be a lazy marketer and do pretty well - build equity in your farm, expand your operation and buy equipment. We’re going to have to be more strategic in it now. And I think the opportunities are going to be there for the person willing to do so.”

Farmers Forced to Cut Costs

Last month’s survey found nearly 80% of ag economists think current commodity prices, plus higher input and operating costs will spur consolidation within the row crop sector. This month, the survey asked what purchasing decisions may take a hit in the months ahead.

At the top of the list of purchase changes for 2025 was decisions regarding equipment. When asked if farmers would reduce machinery purchases for 2025, 50% of ag economists responded “most likely,” and the other 50% said “somewhat likely.”

“It seemed scaling back on machinery purchases was really the number one purchase change, and I don’t think that’s a big surprise. Almost everyone thought that was one place where we would see cutbacks in terms of trying to reduce costs,” Brown says.

“I think in the short-term, that is the easy answer is they’ll scale back on equipment purchases, and we’ve seen that,” Suderman says. “We would also anticipate them to scale back on some of those fertilizers that have less short-term impact, maybe phosphorus, potassium, some of those. I think farmers will stick with the seed technology, they’ll stick with the technology they think gives them the efficiencies that they need in their production.”

Economists point out machinery purchases are likely to slow, which will reduce capital costs, but could also potentially increase repair and maintenance expenditures.

Another change ag economists think farmers will make is to slow technology upgrades. 35% responded a move to scale back technology upgrades is “most likely,” and 41% said “somewhat likely.”

The May Ag Economists’ Monthly Monitor also found ag economists think more farmers will make the switch to more generic products, with 73% surveyed responding with “somewhat likely.”

Economists also think another change for the upcoming year could be looking for lower interest rates. 65% said “somewhat likely,” 27% said “most likely.”

“I think for producers, in terms of what they want to add in 2025, are already beginning to focus on the changes they can make to be more efficient,” Brown says. “This idea of how to reduce costs when the prices for those inputs maybe aren’t going to change as much as they would like, and how to manage those margins, there is really going to be some opportunities to do that to try to make 2025 a better year.”

Economists Paint Mixed Picture on Price Outlook

As farmer possibly look at ways to cut back on spending, volatile commodity prices have become the new norm for farmers. As economists point out, the direction of commodity prices also now hinges on more than just supply and demand.

“Well, I think the biggest impact is probably geopolitical risks, and the advent of the funds, trying to interpret all of that,” Suderman says. “And as you look at the management of billions of dollars now invested in commodities, either being long and buying them or being short selling them, based on what they see happening in geopolitics, based on what they see in the economy, are we in a re-inflation period? Are we in commodity deflation period? And that’s really driving the economy, more than the actual supply and demand fundamentals.”

Still, Suderman and other economists say in the short-term, the outlook for grain prices will center around supply and what happens with weather. One of the major wildcards for the summer is the transition from El Nino to La Nina, and not only how quickly it occurs, but what areas of the U.S. crop and cattle production could be hit by dry and hot weather.

Suderman still thinks the health of the U.S. and global economies will be a critical piece to watch over the next 12 months, particularly if we reestablish inflation.

Other economists also pointed to inflation in the May Monthly Monitor. “I expect a return of inflation and tighter credit due to expanding Congressional spending and the expanding national debt,” said one economist in the anonymous survey.

Beef Prices and Demand

The inflation piece is something Suderman says could impact both grain and livestock prices, especially considering demand and the health of global economy will have a major impact on prices as we test just how much consumers are willing to pay.

“We’re in a world economy where imports of beef in the first quarter of this year were up 25% year on year. So, when we get too expensive, we simply import more. And then the consumer is the driver of what that the demand factor is moving forward,” Suderman says. “If we keep the consumer confidence and we prop it up, they’re willing to pay more, which means import more but holding up our domestic prices. If they’re not, then those imports start to overwhelm us and pressures beef prices even more.”

Pork Price Outlook

Impressive export demand has also been a bright spot for U.S. pork producers. The strong export picture has propelled prices for hog producers across the U.S., which helps paint a more positive picture for an industry that was hit hard over the past 12 to 14 months.

“Hog prices, I think, have been the surprise, and a surprise in a good way,” Brown says. “We started 2024 with lower prices. Generally, those in the survey answering about pork prices would have been slightly more optimistic relative to the last. So, I think when you look at where wholesale pork prices are today, they could be supportive of yet higher hog prices.”

Brown points out consumer demand is also a major factor for the trajectory of hog prices the remainder of the year.

“If consumer demand were to slow, and that’s just as much international demand that has the attention of the economist in terms of international demand has been good for pork this year, if it were to waver in the second half, that could be more troubling for where we’re at the pork market,” Brown says.

What else are economists saying about the ag economy? You can view previous Ag Economists’ Monthly Monitor updates here .

An Important Wildcard In The 2024 Grain Storage Outlook

Tue, 14 Nov 2023 22:15:21 GMT

U.S. grain elevators see potential for big profits in the 2023/2024 marketing year.

According to a recent report from CoBank, an abundance of corn and soybeans has resulted in cheaper basis and bigger carries in futures markets. This follows two years of inverted futures markets.Despite improved conditions for the elevators, there’s a big obstacle standing in the way of their profit potential.

“Many grain farmers have the benefit of being in a very strong cash position following last year’s record farm income levels. They have been quite content to hold on to their grain since prices have fallen,” says Tanner Ehmke, CoBank grains and oilseeds economist.

Lack of Grain Ownership at Elevators
Farmers’ reluctance to sell has resulted in lower levels of grain ownership for elevators and many are currently unable to take advantage of the wider carries and basis levels.

As a result, many elevators are charging higher storage fees and implementing delayed pricing (DP) programs. These programs have become popular as farmers wait for a rally in prices. However, Ehmke encourages elevators to use caution around them.

“Trading DP bushels comes with challenges,” he says. “Although the elevator technically owns these bushels, shipping unpriced bushels is risky since basis could tighten on DP bushels that are already sold – resulting in a loss if the elevator did not sufficiently charge for the service.”

He advises those using DP to acquire corn and soybeans now should make sure their monthly rates are adequately priced to account for the greater financial risk of selling bushels not yet priced by the grower.

Storage Outlook
This scenario, however, is not anticipated to be long term.

“Higher land rents and borrowing costs, combined with rising prices for inputs like fertilizer, will probably motivate farmers to sell as the calendar turns to 2024,” he says.

CoBank anticipates farmers will likely begin selling their crops in January, February and March ahead of spring planting and upcoming operational expenses and/or when prices reach $5/bu. for corn and $14/bu. for soybeans.

The Wildcard
When it comes to basis, any rise is expected to be limited by the large supply of corn and soybeans. At the same time, cheaper transportation rates, strong end-user demand among livestock producers, ethanol plants and soybean crushers should protect it from a significant drop.

Soybean basis in particular is strong due to a smaller U.S. soybean harvest and record processor demand.

The significant unknown, however, revolves around exports.

“The biggest wildcard that could affect the carry in basis is the U.S. corn and soybean export program, which could be awakened by a poor South American harvest, a surprise resurgence of Chinese demand, a return to more normal water levels on the Mississippi River, and weakness in the U.S. dollar,” Ehmke says.

A poor South American crop could mean a tighter basis and narrower spreads in futures – which would look similar to the past two years. A larger crop, however, would likely result in a widening of carries in basis for elevators.

Fireworks from the WASDE Comes in an Unexpected Place

Tue, 13 Sep 2022 19:54:11 GMT

Corn and soybeans are pushing higher after some surprises in the September USDA Supply and Demand Report. Wheat continues mostly lower with no domestic balance sheet changes. Livestock mixed. Michelle Rook gets analysis with Matt Bennett of AgMarket.Net.

3 Reasons Corn Prices Are Staying High

Thu, 05 May 2022 13:58:47 GMT

On March 31, May corn futures surpassed $8. Since then, prices have stayed closed to that notable level not seen since 2013.

Read More: $8, $17, $14: How Historic Are These Grain Markets?

A bullish set of fundamentals pushed corn prices to this high level, says Dan Basse, president of AgResource Company , and those factors could actually be getting more bullish.

“That seems hard to say when you’ve got corn sitting at $8 per bushel,” he says.

Listen in as Basse discusses the grain market outlook with AgriTalk’s Chip Flory :

What factors are at play? Three major forces:

1. A Shrinking South American Crop

This year, USDA is calling for record corn production from Brazil. For 2021/22, the country’s corn crop is predicted to hit 116 million metric tons (mmt), which is larger than last year’s crop by 33%.

Yet, severe drought conditions are impacting the Safrinha corn crop in Brazil, which is in its vegetative state and will be harvested between May and August. Read More: Brazil’s Drought: The Trigger that Could Take Corn Prices Higher?

Basse says his colleagues in Brazil are predicting the total Brazilian corn crop down to be only about 104 MMT.

“A lot of the key growing areas haven’t had a meaningful rain for over 30 days,” he says. “This is a big deal; this crop is being pulled downwards.”

If the Brazilian corn crop is significantly smaller, Basse says the big questions are: Who will make up the production difference? Where will buyers turn?

“Beyond the U.S., there is no other place the world will go,” he says.

2. U.S. Planting Delays

As of May 1, USDA estimates 14% of the U.S. corn crop has been planted. That compares to a five-year average of 33% planted. Last year, 42% was planted by May 1. This year’s planting pace is the slowest since 2013.

Roll over the grey buttons below to get a closer look at each state.

“The only thing we can say with certainty is we are delayed,” Basse says. “What late planting means is we have to have a lot of good things happen during the summer growing season.”

Basse says after May 10, if the forecast is still preventing significant corn planting progress, the market will more heavily factor in the ramifications of a late-planted crop.

“On Monday (May 9), if we have 20% to 24% of the corn crop seeded, we will be pushed into a late-planted year,” he says. “The record low is 17% in 1993.”

For 2022, USDA is predicting a record national average corn yield of 181 bu. per acre. Last year the national corn yield was 177 bu. per acre.

“USDA is probably 4 bu. or 5 bu. too high on the average national yield because of planting dates,” Basse says. “Even if we tie last year’s corn yield, which I think is a stretch at this point, it’s a fairly significant drop in production of around 350 million bushels.”

USDA will release its monthly Crop Production and World Agricultural Supply and Demand Estimates (WASDE) reports on Thursday, May 12.

Basse says USDA will likely not adjust the corn yield in that report, nor the June report.

3. Strong Margins for Ethanol Production

Another positive factor for corn prices is ethanol production, which consumes roughly 40% of the U.S. corn crop is refined into ethanol.

“What shocks me in even though we have $8 corn and $17 soybeans, we have not seen crush margins or ethanol margins really go to the negative,” Basse says.

Ethanol processors are still looking for bushels to buy, he says, and bidding aggressively in the cash market.

“My ethanol plants today are making about 80¢,” Basse says. “So, they’re going to keep bidding for corn.”

Here is Iowa State University’s latest report on ethanol plants’ return over operating costs:

How Should You React?

With this bullish picture for the corn market, what steps should producers take to manage risk?

“Think about the volatility in the market and have a plan for selling at least the first 40% or 50% of your corn crop, which makes you a sizable profit,” Basse says. “This is a year that we also need to maintain some ownership. Don’t let go of a crop too early or look at some opportunity to at least get back into the game.”

If the U.S. faces yield-robbing weather issues this summer, Basse says prices could jump again.

“We really don’t know how high is high,” he says. “This is one of those peculiar years, much like the early 1970s, when the market starts to run we really don’t know where the ceiling will be.”

Read More
$8, $17, $14: How Historic Are These Grain Markets?

Corn Planting Progress the Slowest Since 2013

Grain Prices ‘Well-Supported’ for Next Three Years, says RaboResearch Economist

Read More: Brazil’s Drought: The Trigger that Could Take Corn Prices Higher?

Is the World Running Out of Grain?

Can Corn Really Hit $10 This Year? Traders and Farmers Already Bet 90 Million Bushels It Will

Jerry Gulke: The Grain Market Plot Thickens

Up, Up, Up: Corn Prices Gain $1 in Just 14 Days

Tue, 04 May 2021 21:10:03 GMT

Talk about a trifecta: Corn, soybeans and wheat futures prices all finished Tuesday with double-digit gains. At one point the July corn futures contract topped $7 while July soybeans were near $15.40.

“Right now, we’re in a demand bull market that is continually having world supply problems,” says Tommy Grisafi of Advance Trading, of Tuesday’s price action. “It’s probably the most dynamic market I’ve ever traded in my life while trying to help people manage risk.”

Watch his full comments in the video above.

Grisafi says dryness concerns in South America and in the U.S. combined with a surge in global demand is helping drive this rally.

“You need two things to make a fire,” Grisafi says. “We’ve had that spark and we have that fuel and it’s consuming. This will be the most heightened sense of awareness of a growing season ever.”

He says it took 2,400 days for corn futures to get above $5 then 99 days to get above $6 and now just 14 days to get above $7.

“Expect volatility and understand truly how to manage risk,” advises Grisafi.

As the season progresses, Ted Seifried with Zaner Ag Hedge doesn’t expect that volatility to ease up.

“A lot of times this sort of volatility might indicate we’re reaching a sort of near-term high,” Seifried says. “I don’t think the highs are in. We very rarely put the highs in April or May. We’ve got a whole weather season to go in front of us and so unless something happens to make us really question the demand side of the balance sheet, we’re going to really need to be on our toes throughout our growing season.”

Weather remains a question as western Iowa and North Dakota continue to deal with significant drought and dryness.

“The next thing that will catch people’s attention is the 7 million acres of soybeans that are supposed to be planted into record dry soils in North Dakota,” Grisafi says. “I have several clients who had to quit planting because the soil was so dry they couldn’t even seed wheat.”

In other places, favorable and dry spring weather has helped to speed planting along. In states such as Iowa, Texas and Tennessee, nearly 70% of the corn crop is already planted. North Carolina farmers have planted nearly 80% of the state’s corn crop.

“We’re making some planting progress but the flipside of that is, are we going to get enough rain to get this crop off and running, especially there in the western belt?” asks Seifried. “Even if we get the intended acreage in and then some, we’re still going to have to see stellar yields this year to have a comfortable balance sheet for this next marketing year.”

The old-crop situation remains tight, notes Mike North of ever.ag.

“The moment we start to stress the perceived crop that is in the field and maybe mentally start to shave some bushels off of that because of how dry it is right now during planting, that gets people a little bit excited,” he says.

Given the dryness situation in the U.S. and supply questions in Brazil, North says, grain buyers are being forced to make sure they have enough inventory to meet their own demand. He knows at some point the price is just too high.

“As you look at these types of prices, they can come in a flash and leave just quickly,” North says.

“The job of the market is to get people to quit buying stuff,” Grisafi adds. “The job of corn is to say, ‘Hey, somebody drop out, somebody quit feeding cattle, somebody quit feeding hogs, somebody quit making ethanol.”

In the meantime, Grisafi says he’s concerned too many farmers sold bushels too early.

“If you’re a scale-up seller and you sold this corn at $4, $4.50, $5 or $5.50, you have close to a dollar loss on all your first bushels,” he says. “We’re in the biggest commodity bull market in history, and some people still don’t understand the intensity of this rally and they’re out of position.”