Grain markets are navigating a complex web of geopolitical friction, weather uncertainty, and shifting trade policies. Oklahoma State University Extension Crop Marketing Specialist Dr. Todd Hubbs sat down with Farm Director KC Sheperd to break down what producers should watch in the corn and wheat sectors, as well as key strategies for managing risk in an unpredictable market.
Corn Markets Weigh Tour Findings Against Trade Risks
Recent findings from the Pro Farmer Crop Tour sparked market discussion after projecting corn yields well below earlier estimates. Hubbs noted that while the tour points to real crop stress, market reactions should be measured.
“That was a low yield case for corn, lower than I expected,” Hubbs said. “They’re not perfect, but who is? We’ve seen the conditions trending down. There’s a lot of talk about issues with pollination and filling out the ears properly. I don’t think the yield’s that low, and the market’s pricing it in a bit. Is it overdone? Possibly.”
Hubbs noted that December corn touched $5.25 last week before pulling back. While he remains closer to the USDA’s August yield projections rather than the sub-173 bushels per acre numbers floated on tour, the supply narrative continues to provide price support. However, demand headwinds loom on the horizon, particularly involving trade disputes with Canada.
“We’ve started this trade kerfuffle with Canada again, and I’m concerned about that,” Hubbs explained. “We’ve been sending about 25 million bushels worth of corn a month in ethanol to Canada this marketing year. They’re our biggest buyer of ethanol overseas, and it’s a real problem if they end up putting a tariff on that and we start losing market share or not moving it at all.”
Hubbs emphasized the vital importance of agreements like the USMCA for agricultural stability.
“Canada and Mexico are our biggest buyers of agricultural products,” Hubbs said. “It really hurts us in the ag sector. It’s really disappointing. We saw what happened with the cattle markets last week. This isn’t going to help us long-term to move our crops and be competitive in a world market.”
Wheat Watch: Geopolitical Pressure and El Niño’s Shadow
Wheat prices have experienced pressure over recent trading sessions, driven largely by shifting diplomatic signals and export dynamics in the Black Sea region.
“Ukraine announced there may be some diplomatic track about the Black Sea attacks,” Hubbs said. “Russia’s talking about suspending the export duty on their wheat through the end of the year—wheat, corn, and barley. That’s been floated; I don’t know if they’ll do it, but they’re obviously having trouble moving their crops, and it’s a problem. If they do get some kind of deal, that’s going to be pressure on our prices.”
Looking abroad, Southern Hemisphere producers like Australia and Argentina are currently showing solid crop conditions, though an emerging El Niño pattern could alter the outlook.
“If you see those crops start to deteriorate, in Australia in particular, you’ll start seeing it rally a bit, but that’s a heck of a thing to bet on,” Hubbs noted. “The crops are in the Black Sea—Ukraine and Russia have the crops. Yes, they’ve blown up some bins, they’ve sunk some ships, but they’re still basically there. They’re just having trouble moving them. If they start moving them for some reason, it will put pressure on.”
Pricing Signals and Avoiding Storage Pitfalls
For growers evaluating forward pricing for the next crop year, July contracts have hovered near $7.75 to $7.80. Factoring in local basis, Hubbs encouraged producers to evaluate their numbers carefully.
“If you’re thinking of like a basis in the minus-60, minus-50 range depending on what your quality turns out being, if you can get over $7 a bushel, you might think about pricing some of it,” Hubbs advised. “I understand production risk is extremely high, particularly after what happened last year, but if you have crop insurance—if you’re at 75 or 85 percent—you might want to think about pricing some new-crop bushels if you think you can cover it.”
When asked about the single biggest pitfall producers face in sideways or choppy markets, Hubbs pointed directly to holding grain in storage without a clear plan.
“There’s a tendency to hold onto stuff too long and store stuff for quite some time,” Hubbs said. “If you’re storing it commercially, let’s say you’re paying six cents a bushel a month. If you sold those, you can make money on that money. You need to calculate that there’s an opportunity cost for that money.”
Hubbs stressed that having a disciplined marketing strategy is essential to avoid turning storage into unmanaged speculation.
“If you have a strategy employed where you’re like, ‘I’m storing, I’m taking the carry, I’ve got an idea where I’m going to be in December or next March, and I have a plan in place,’ so be it,” Hubbs explained. “There’s a time to sell a little bit, and there’s a time to sell a lot, and I know it’s sometimes hard to see when those times are. But when you’re up in a cash price level where you’re making money in this crazy environment, you might ought to take it to the bank.”
