Naomi Blohm

Isn’t volatility fun?! Yes, that was total sarcasm in that question.

With the near daily $0.20 to $0.40 price swings in grain prices over the past few weeks, even the most seasoned trader is reaching for their roll of Tums. The volatility will likely continue as every U.S. Department of Agriculture report and weather forecast will continue to allow for wild price swings for agricultural commodities. Let’s take a closer look at what June may bring.


Wheat futures continue to be the follower in the grain complex. The timely rains that occurred in early May were enough to push prices lower as trade now feels that crop size will be ample, with production and ending stocks likely to increase. The price sell off in May nearly wiped out all the gains made during April. Keep in mind much can change with the weather going forward. Recent rains may prove to be too much, and what if quality concerns suddenly become an issue? In addition, trade will keep a keen eye to wheat weather across China, Europe, Russia and the Black Sea region throughout the summer.

For corn and soybeans, thanks to tight old crop ending stocks, grain prices rallied in early May to prices not seen since 2012. The tight ending stocks will continue into summer for old crop as the industry finds out exactly how little old crop supplies are actually out in the countryside. Cash basis will likely stay firm until harvest.

New crop prices will experience dramatic price volatility with changing weather forecasts, and two key USDA reports during the month of June. The two big reports are the June 10 regular monthly supply and demand report. Trade is eager to monitor old crop ending stocks. Trade feels the old crop ending stock should likely get smaller. That smaller old crop number then translates into tighter new crop carry-in for the 2021-22 marketing year.

The bigger report for grains is on June 30. That is the Quarterly Stocks and Planted Acreage Report. Both will bring key information to the marketplace, which will affect price until August. Expect wild market action on that report day, as it will also be first notice day for July futures contracts ahead of delivery. It is also month end, and quarter end, so funds will likely be squaring up positions.


Hog futures continue to extend the price rally with nearby futures contracts trading near the $116 price point (as of this writing) as cutout prices surge higher. The recent pork cutout value has surged to over $123, a price not seen since October 2014. Domestic demand is strong. The re-opening of restaurants is supportive. In addition, the nice weather and summer grilling season is supporting demand for pork products, especially pork ribs.

As of late May, cumulative export sales for pork totaled 986,500 tons, only slightly behind last year’s record exports of 1.1 million tons for that same time of year. For now, Chinese imports have been strong, but there is always the watchful tone that their demand may fall as the Chinese herd is rebuilt. While the outlook is friendly, this is one market that needs to continuously watch for a top in the weeks ahead. There is a USDA Hogs and Pigs report out on June 24, which may provide insight as to domestic supplies.


The cattle complex continues to trade in a modest sideways fashion. As of this writing, nearby June futures continue to trade at a slight discount to cash, with cash prices overall staying firm near the $117 level. Domestic demand continues to shine as restaurants re-open and summer grilling is just getting started. Interesting to note is the fact that boxed beef values are trading near $329, their highest value since June 2020. Packers continue to reap most of the benefit of higher values, however. Looking at global demand, U.S. exports continue to shine thanks to demand, fair prices, and the fact that Argentina has stopped their beef exports for 30 days.

One item the market is monitoring is if there are more cattle coming to market in the coming weeks as feed prices continue to be lofty overall, and pasture conditions in the west are of major concern. The May 24 crop progress report showed that 39% of U.S. pasture conditions were rated poor to very poor. This is alarming as over half of the nation’s beef crop is raised in those drought areas. Should drought continue, it may force beef producers to market their cattle earlier than normal, which could put ample supplies on the market for the short term.

The next Cattle on Feed report is not until June 25. Until then, prices may continue to march in this sideways pattern.


Class III milk futures seem to have found short-term support near the $18.00 mark—as of this writing. Prices will likely struggle to see a significant price increase in the short term as the recent milk production report pegged production up a whopping 3.3% from the month prior.

Trade had been thinking that the higher feed costs may have impacted feed rations, which may have led to lower production. Not the case. This higher feed cost concern continues to be a market watcher for latter summer months.

Higher grain prices and the fact that nationwide hay stocks are down 11% from a year ago are reason to watch the dairy market closely. Domestic demand for cheese remains strong overall. The market is also curious of the implications from the announcement of the Biden administration, which has suggested that Canada was improperly allocating United States-Mexico-Canada Agreement tariff-rate import quotas on 14 dairy products.

Be ready. The whip saw price action of increased volatility escapes no one, with dramatic daily trading ranges rattling nerves. The funds have been buyers of 20,000 contracts of corn one day, and sellers of 20,000 contracts of corn the next. Expect the volatility to last throughout summer. Add to it the fact that the funds now have the ability to hold/own even more contracts of grain will create even more dramatic price action. Do be mindful, when prices are higher and the outlook for grain prices is friendly, it makes it easier to be complacent with your marketing. Make sure you are monitoring the value in front of you daily.

Editor’s note: Naomi Blohm is a marketing advisor with Total Farm Marketing by Stewart-Marketing and she is a regular contributor to the Iowa PBS series “Market to Market.” She can be reached at

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