Running out of Runway
Even though farmers are out busy in the field and focused on the next crop, we often get questions at this time of year about selling the remainder of last year’s crop. For most farmers, there isn’t much left to sell but there are often a few tonnes held in reserve for a possible spring or summer rally, or just in case the upcoming crop runs into trouble.
The question is often phrased something like, “What are the things that could push the market higher?” or “Could we see a bounce yet?” At that point, we usually start listing possible (usually weather-related) factors that could give prices a lift but in most cases, our answer is that a meaningful rally at this time of year is quite unlikely. Of course, we then get the classic Jim Carrey line, “So you’re telling me there’s a chance.” Yes, there’s always a chance but the odds of a summer rally are quite low.
We often talk about seasonal price tendencies and one of the most consistent patterns is for prices to decline during the summer; no surprise to anyone. By summer, supplies are drawn down to the lowest levels all year, but buyers are typically waiting on the sidelines for the next crop. And this is also when farmers are finishing old-crop sales and cleaning out their bins. Both these typical behaviours weigh on prices through the summer.
If memory serves, the only exception we’ve seen to this pattern occurred in the summer of 2021, when a wicked drought was on everyone’s minds. Even then, prices for most crops had started to dip seasonally in May and June before turning quickly higher again as the drought took hold. But so far (fingers crossed), 2025 doesn’t look anything like 2021.
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