Commodity Markets

Yes, the time for cookouts and swimming pools, family road trips and fireworks are upon us. But most of all, the summer season is hot, and back in Kansas where I grew up the heat was mixed with a constant blast of furnace-like wind and no rain.

I have to laugh each year as many grain market commentators get excited about forecasts of hot, dry weather during the months of June, July and August. It’ s almost as if they are chickens, incapable of remembering not only from one year to the next, but often from day to day.( One of the reasons I often refer to this group as“ Chicken Littles.”)

But speaking of markets, and the turning of the calendar page, what tends to happen to grains over the course of the summer? Let’ s take a look at normal seasonal tendencies based on the various National Cash Indexes( national average cash prices, intrinsic value of the markets).

Corn Prices Tend to Slip Early

Corn: As usual, let’ s start with King Corn. By the time we get to the end of the summer season there will be some newly harvested bushels rebuilding supplies in relation to demand.

A look at the seasonal study for the National Corn Index shows the average seasonal high weekly close tends to be posted between the second week of May( 5-year index, red line) and the second week of June( 10-year index, blue line). If we look at the summer season only— from the last weekly close of May through the final weekly close of August – we see solid selloffs by the cash market, regardless of time frame.

The 5-year index shows an average drop in price of 14 %

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