Grain Markets Are Stuck But Hedging Decisions Can’t Wait

Why February May Be the Most Important Month for Corn & Soybeans

Market Check: Tight Spreads, Slower Movement, Tough Decisions

Grain prices aren’t moving much, but your marketing plan probably should be. This week on Hedge Heads, Jon Prischmann and Ryan Tungseth unpack why the February window is so critical for both old and new crop decisions. Corn spreads are sending clear signals: grain isn’t moving, demand is steady, and time is running out to capture seasonal strength.

While the market looks boring on the surface, there are actionable moves if you know where to look.

Corn: The Dec 26 $4.60 Question

Corn is sitting around $4.60, which may not be exciting, but it is potentially important.

• Old Crop: The March/May spread shows limited movement into commercial channels. That implies producers are still sitting on supply, waiting for a reason to move.
  

• New Crop: Producers are eyeing hedge to arrives or straight futures sales, but with the hope of a weather driven rally this summer.

The real question: Should you lock in now or hang on? Jon argues that even if you make sales now, you don’t have to give up your upside as long as you plan re-ownership the right way.

Strategy Spotlight: Re-Owning with Options

One of the best tools right now? Buying corn calls after a sale to keep upside exposure open, but which month you choose matters.

• July Calls: Cheaper and more reactive to weather, but risk running out of time if the market doesn’t move early.
  

• September Calls: More expensive but offer more runway through August in case of a late season rally.

The key takeaway: Don’t just reach for the cheapest option. Know your risk window and your goal. And if you’re re-ownership, you need enough time for weather to do its thing.

Soybeans & Wheat: Don’t Sleep on Seasonal Moves

Beans have bounced off $10.60 twice and could get tight this spring, especially if the acreage mix shifts. No one’s going to tell you they’re underbought until it’s too late.

Wheat remains rangebound, but the 30-35 cent swings are offering opportunities for strategic option selling and spread plays. That range has been one of the only consistently reliable setups this year.

Cattle & Natural Gas: More Risk, Less Room for Error

Feeder cattle hedging is getting expensive but may be necessary as fundamentals start to soften and seasonal highs approach. Jon walks through a few long dated put ideas, even as premiums remain steep.

Natural gas made headlines this week with a massive weekend gap down. If you're active in energy markets or planning your spring fuel purchases, keep an eye on volatility as we move into March.

Final Thoughts: Don't Get Bored Into Bad Trades

It’s tempting to do “something” just because prices are stagnant, but don’t mistake action for strategy.

There’s time to build layered hedges, explore re-ownership, and set realistic targets, but avoid selling calls just because you’re bored. As Jon puts it:

“This isn’t even picking up pennies in front of a steamroller; it’s picking up half a penny in front of an atomic bomb.”