What Happened

In a year marked by slim profits and tight margins, agricultural producers are grappling with critical decisions. A recurring dilemma is whether to fulfill existing contracts (whether basis or price later) or to roll these contracts over to a future month. While some might find this routine, it’s valuable to unpack the pros and cons that such decisions entail.

The year 2025 didn’t provide many opportunities for forward contracting. This past fall, many farmers enjoyed bountiful harvests, yet sold little of their crop in advance. Basis contracts gained traction late in the summer when futures prices were low. As the end of the month approaches, the question remains: what steps should be taken next?

Why This Is Important

Navigating the myriad marketing decisions can feel overwhelming, yet decisions are necessary. Sometimes these choices are clear-cut—“no-brainers”—that remain valid even with hindsight. However, more often than not, decision-making occurs in uncertainty, particularly in the current corn market, where prices have shown minimal movement for several months.

Historical trends indicate that prices often reflect uncertainties about the year ahead, including weather patterns in the Southern Hemisphere in the coming months. Thus, storing grain may be a sound strategy. Yet recent forecasts for this region suggest favorable weather conditions for production. Domestic demand for U.S. corn remains strong, evidenced by impressive year-to-date export figures. Moreover, all eyes will be on the USDA World Agricultural Supply and Demand Estimates (WASDE) report on January 12, which will offer its final yield estimate for the 2025 crop. Many experts believe the current yield estimate of 186 bushels per acre (bpa) is overly optimistic, as increased acreage and expectations for yields above the 2024 record of 179.3 bpa may solidify support for higher prices.

What Can You Do?

It can be posited that navigating decision-making in a low-volatility market is just as complex, if not more so, than during times of rapid price changes. An age-old adage states: “Never sell a quiet market.” To address the core question—roll or sell—determine your risk tolerance. Calculate both the actual costs of rolling contracts and the opportunity cost of having cash tied up in stored corn. Also consider the intangible aspects like the level of stress you are prepared to endure. Explore multiple strategies and weigh their pros and cons.

If your risk (including the costs to roll and fluctuations in market price) and stress levels are manageable, and logistics for delivery aren’t a concern, it might be prudent to roll contracts. Conversely, if the risk feels excessive, selling could be the better choice. Additionally, consider tax implications. If selling is the route taken, should you explore purchasing call options?

There may not be a universally “best” strategy; “best” is relative to specific circumstances. Most strategies come with gray areas, suggesting outcomes depend on how and when the market moves. The best approach may very well be comprehensive planning and preparation to ensure you are ready to act with a well-thought-out strategy.

Find What Works for You

Collaborate with professionals to identify strategies that best match your operational needs. Communication plays a crucial role. Ask probing questions and seek clarity on potential rewards and consequences before implementing decisions. The aim is to make informed choices that benefit your operation rather than letting emotional responses to market fluctuations govern your actions.

Editor’s Note: If you have any questions regarding this perspective, feel free to contact Bryan Doherty at Total Farm Marketing: (800) 334-9779.

Disclaimer: The information presented is believed to be accurate but cannot be guaranteed. Individuals acting on this information do so at their own risk. Commodity trading involves significant risk of loss and may not be suitable for everyone. Thus, carefully assess whether such trading fits your financial situation. Any decisions made to buy, sell, or hold futures or options based on this research are your responsibility and not endorsed by Total Farm Marketing. For further details, refer to our companies’ respective registrations and statuses.

About the Author: With three decades of experience at Total Farm Marketing, Bryan Doherty has cultivated a loyal following throughout the Grain Belt. As a senior market advisor and vice president of brokerage solutions, he is committed to the success of his clients. Armed with extensive market knowledge, he communicates clearly and effectively to ensure clients are confident in their decisions.