Corn Numbers Say "Hold," but the Market Says "No"—What’s Next?

Ryan Tungseth
Jul 15
2 min read

Hedge Heads: Outsmarting a Tough Corn Market

USDA reports scream “tight corn supplies” at 1.76 billion bushels, but futures are stuck in a bearish rut. Strong regional basis (like 65¢ over in Ohio) and July deliveries hint at demand, yet funds keep shorting, betting on 180+ bu/acre yields and tariff noise. In this week’s Hedge Heads podcast, Jon Priman and Ryan Tungseth unpack this contradiction and share practical strategies to protect your bottom line. Here’s how to stay proactive in this frustrating market.

Market Snapshot

Corn’s Tug-of-War: USDA’s ending stocks keep shrinking (1.76B bushels), but futures ignore it, driven by perfect weather and fund shorting. Yields are now debated above 180 bu/acre—no one’s betting below.
Tariff Fatigue: Threats of 30% tariffs on Canada, Mexico, and Japan barely moved markets—traders are skeptical, like when Ukraine port bombings stopped moving wheat.
Strong Regional Signals: Ohio producers are fetching 65¢ over basis for old crop corn, showing local demand. Yet, nine July futures deliveries suggest ample supply in some areas, muddying the picture.
Soybeans & Wheat: November ’26 beans could rally if acres tighten (July/Nov ’26 spread at +13¢). Wheat’s dragged down with corn but barely discussed.
Storage Crunch: High interest rates make holding grain costly—sitting on corn into July’s been a “disaster,” but February/March worked last year.

Actionable Strategies for Hedgers

Track Cash Markets for Clues USDA numbers say “hold,” but mixed signals like Ohio’s 65¢ over basis and weak spreads (e.g., July/Nov ’26 beans at +13¢) tell the real story. Watch for widespread basis strength or tightening spreads to confirm a bottom, like 2019’s rally after prevent-plant acres. Pro Tip: A strong basis rally could signal a powerful turn—don’t jump early, wait for confirmation.
Options: Small Wins, Big Discipline
- Selling calls on stored grain (e.g., March $5 calls at 6¢) is risky with low premiums—skip unless they spike.
- Bearish Play: Buy cheap calls (e.g., 3.5¢ for Dec corn) to set up a covered short on a 15¢ rally, locking in gains with less risk.
- Exit Smart: July ’26 corn calls sold at 30¢ are now 11¢—lock in ~19¢ profits early to avoid South American or weather risks.
Plan for 2026/2027Big carryovers could shift price peaks earlier. Monitor December ’26 corn and November ’26 beans for marketing opportunities, especially if bean demand spikes or acres shrink.
Ditch the Twitter NegativityJon and Ryan warn against getting “bitter” over low prices. Focus on small wins—three 5¢ moves add 15¢ to your bottom line. Stay in touch with advisors for fresh ideas, like the Hedge Heads team’s daily client calls.

Historical Lesson: 2019’s Wake-Up Call

In 2019, USDA overstated carryover by ~2B bushels, missing a rally when basis tightened. Today’s market feels similar—bullish numbers, bearish price action. Strong basis (like Ohio’s 65¢ over) and deliveries could be early signs of a 2020-style turnaround.

Final Thought

This market’s a grind, but strong basis and deliveries hint at demand beneath the surface. Low prices spark demand, and when cash markets align with USDA’s numbers, the rally could be sharp. Stay nimble, avoid over-hedging, and plan for small, smart moves to come out ahead.

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