Melvin Brees
Farm Management Specialist
University of Missouri Extension

 

 

 

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Please send your comments and send suggestions to Melvin Brees, Farm Management Specialist, University of Missouri Extension, #1 Courthouse Square,  Fayette, MO 65248, call 660-248-2272, or send messages by e-mail to: breesm@missouri.edu.
March 2, 2001

Best Time to Sell?

Commodity prices tend to follow predictable patterns each year based on the growing season along with supply and demand trends. Seasonal patterns don't do a very good job of predicting when the highest price will occur. However, they do offer good suggestions on when prices are likely to be above or below average.

Corn prices are generally low during harvest in October. As harvest winds down, prices tend to rally some into November or early December. The approaching holiday season and early New-Year sales often causes prices to decline again from December into February. The spring rally usually begins and continues from March into May. Only occasionally does any single year's highest price occur during this period. But, over time, these prices average higher than any other time of the year--often peaking in April. On average, April is the best time to sell corn! Once the crop is planted and off to a start, prices tend to decline during May and most of June. Poor weather can set up a late June to early July price rally--sometimes a sharp rally that can produce the year's highest price during the summer. However, if weather remains normal, prices usually begin a summer-long skid (July to October) into harvest with only a limited bounce sometimes occurring in September. Most yearly price lows occur during this July to October period.

The soybean annual price pattern is similar to corn with harvest time lows occurring in October to early November and then followed by a small rally in November-December. Prices then decline creating what is often called the "February Low." The spring rally usually happens from March through May with soybean prices usually peaking a little later than corn in May. Like corn, this rally probably won't produce the highest price of the year. However, based on the long term average prices, May is the best month to sell soybeans! After the crop is planted prices usually decline into June. Poor weather can also produce sharp summer soybean price rallies (June-August) that can produce the year's highest prices. However, with normal weather prices generally begin a long decline into harvest with possibly a small "last chance" price rally in September. The lowest prices of the year most often occur during the June-October period, making it the worst average time to sell beans.

The average seasonal patterns suggest that the best times to sell are corn in April and soybeans in May. An Iowa State University study backs this up, suggesting that pre-harvest spring sales tend to generate the highest returns. Will it work this year? Prices did fall to lows in February. Will a spring rally now provide pricing opportunities? Some say it won't because huge South American supplies and poor corn exports will keep a lid on prices. Others believe that the big South American crop is already factored into the markets and strong demand along with any weather concerns will produce the usual spring price rally. It's important to remember that individual years vary considerably from average and the annual high price seldom occurs during this period. This year remains uncertain, but the seasonal odds favor pricing opportunities during this time. Early sales during a spring rally won't necessarily be the "best" sales (year's highest price), but over time they tend to be the "best average prices!" --Melvin


University of Missouri ExtensionDecisive Marketing - March 2, 2001
http://outreach.missouri.edu/agconnection/DCT/DM010302.html -- Revised: April 20, 2004
breesm@missouri.edu