Farmers Must Adapt to Grain Price Rally, Experts Warn

Grain prices are surging into harvest season, but DTN lead market analyst Rhett Montgomery warns farmers against waiting for the perfect price. Instead, he advises producers to use the rally to evaluate profitability, manage risk, and build a marketing plan that can withstand volatility.

Montgomery's key takeaway is simple: know your costs and what price works for your operation. If a certain price provides an acceptable return, producers don't need to hold out for a higher number.

He cites the example of corn prices, saying if $5 plus cash sale makes sense for a farmer's operation, it's likely that prices could test $6 eventually. However, Montgomery notes that this is not a guarantee and emphasizes that selling $5 corn has rarely been a bad decision in recent years.

Montgomery attributes the rally to tight corn stocks relative to use, strong demand, and broader macroeconomic factors. He also points out that nearly 1.2 million futures contracts across grain and oilseed markets are held by noncommercial traders, creating both opportunity and risk for producers.