Fundamentally Speaking

Farmer Sales of Corn vs. Corn Price Changes

Joel Karlin
By  Joel Karlin , DTN Contributing Analyst

In an earlier piece we had noted that uncovered corn end-users may be surprised to learn that corn prices tend to appreciate in value in October even though this coincides with the glut-slot of harvest.

Given this information we were curious about the average monthly price change for all twelve months and how this compared to the percent of farm marketing's by month.

This chart plots the average percent of corn sold per month by U.S. farmers' vs. the average monthly price change for corn futures using data covering the period 1995 to 2013.

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Farmer marketing's of corn are the second highest in October where from 1995 to 2013 on average 13.3% of supplies were sold and this is a month when corn prices have averaged a 2.3% advance.

The third highest percent sales by month occur in November when the average price of corn futures has declined by 0.9%.

The greatest percent of corn sold by farmers occurs in January, in a new tax year with prices tending to recover from their harvest lows.

On average 14.6% of corn is sold in January, a month when corn prices average a 0.8% increase.

The largest corn price declines usually occur in June and July, down 2.9% and 2.4% respectively though by this time of year farmers have sold over 80% of their crop.

Producers may pay attention to when the most propitious time is to market their crop on a seasonal basis but cash flow considerations, input purchases, quality of corn, availability of off and on-farm storage, and market expectations all play a part in determining when and how much to sell.

(KA)

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