The Indicator That Shows You When a Market Is Running Out of Gas

The One Question Every Producer Asks

Markets don’t ring a bell when the top is in. They get noisy, emotional, and full of conflicting opinions. Headlines swing back and forth. Basis can look bullish one day and neutral the next. Social media is more misleading than ever.

But one signal consistently cuts through the noise: the spreads.

The same spreads that quietly flagged last year’s corn top weeks before the break are now one of the best tools producers have for timing sales without chasing every bump in the market.

This week’s newsletter breaks down how to use spreads as a timing tool—what “healthy” vs. “unhealthy” structure looks like, how corn differs from beans and wheat, and why spreads reflect the true needs of commercial buyers better than any report or opinion.

Why Spreads Matter: They Reveal What Commercials Need

Most marketing tools tell you how people feel.

Spreads tell you what buyers must do.

Because commercials can’t hide their needs in the spread structure, it becomes one of the cleanest, most reliable ways to spot:

• When the pipeline is tight

• When commercials are paying up for grain

• When farmer selling is overwhelming demand

• When the market is finished rewarding patience

Last year, the March–May corn spread narrowed sharply into mid-December—then quietly rolled over. Meanwhile, futures kept pushing higher. That divergence was the warning shot. And it turned out to be accurate.

Corn This Year: What the Structure Is Saying Now

Right now, March–May corn is sitting below where it was last year, but not too different.

This year’s structure reflects:

• Stronger export demand than expected

• A heavy national supply

• Producers still holding a lot of grain

Nothing in the spread structure suggests a shortage. Nothing suggests panic buying.

And nothing screams “top” yet.

Your job now:

Watch for change, not a specific number.

If the spreads begin to widen quickly while the board is still rising, that’s your early signal that the market is finishing its job—and that farmers are finally selling enough to fill pipeline needs.

If spreads keep tightening even as futures rise, patience may still be rewarded.

Beans: If You’re Holding, Know Why

Soybeans are a different animal. The market is much smaller, and when commercials need beans, spreads can invert in a heartbeat. But this year:

• Export pace is struggling

• Recent flash sales were smaller than hoped

• China’s buying program is behind schedule

• Brazil—weather permitting—still sets the tone

If you’re holding unpriced beans right now, you’re betting on one of two things:

1. A meaningful South American weather event

2. A sharp jump in late-season Chinese buying

Both are possible. Neither is guaranteed.

For most operations, that means tightening downside protection while leaving room for a late-season pop.

Wheat: A Tightening Spread, but Not a Bull Story Yet

Wheat versus corn is back toward a narrower-than-normal relationship. That typically signals more wheat working into feed channels—good for wheat demand, but not enough to build a wheat bull market on its own.

Wheat is cheap relative to corn, but that doesn’t make it bullish.

Use it to understand feed substitution, not to chase a short-term trend. Over time this spread will matter for corn demand.

Cattle: A Bounce That Looks Familiar

Cattle’s violent rebound has everyone’s attention, but big rallies after big breaks aren’t unusual. The recent swing looks a lot like the 2015 pattern—sharp decline, overshoot, then a corrective pop fueled by volatility and cash market resets.

The fundamentals haven’t shifted enough to declare a new trend, and volatility remains high.

Coverage is expensive, but so is going unhedged in a market this unstable.