The March 1 stocks reported by USDA showed large year-over-year increases in “off-farm” stocks — commercial grain companies/end users — for wheat and soybeans. This contrasted sharply with the report for corn, which showed 55 million fewer bushels of off-farm stocks and 932 million bushels of increased on-farm stocks. In commercial elevators, the data is more anecdotal, but producer selling of all three crops was relatively strong through Q1 and Q2. This helped allow commercial grain companies more flexibility to merchandise. Basis coverage and futures spreads were somewhat orderly through winter and early spring.

Can this continue into the fourth quarter of the marketing year? To focus on fall crops, we see dynamics of cash markets with some uncertainty. As of this writing, the May/July spreads for corn and soybeans are paying carry above interest cost. However, the July forward spreads diverge in this regard. July/September corn at -5 cents is roughly a 6.5% return to money, before basis considerations. July/August soybeans are inverted at +7 1/2. Both commodities’ futures spreads suggest basis near or above futures equivalent as we approach July 1.

The art of merchandising in this time window is largely a function of time, space and money. Many end-user markets are not showing futures equivalent cash bids for June/July. As a shipper with time, space and money, one can leave short hedges no further forward than July and wait for either better basis opportunities or weakening futures spreads.

More realistically, shippers see the clock ticking with fall harvest, or even wheat harvest, getting closer, and space plans have to be made. There are several keys to merchandising in that scenario.

Don’t sell values you can’t replace cheaper.

Ensure your new-crop bids aren’t at levels where you’re selling a value today and replacing those bushels with a higher value. Today, that’s easy on soybeans with the July/November futures inverse. On corn, with a -20 July/December spread, a sale at option the July is -20 December before interest.

Don’t give away carryover space.

Open storage bushels need appropriate charges to reflect the value of space from an old-crop to new-crop perspective.

If short the basis, keep futures long in the most protective month.

This is usually the nearby month, as cash basis only converges in a delivery period regardless of the reference bid month of your buyer. If rolling longs forward, one must see basis below futures equivalent and/or have the ability to get shorter the basis if values improve further.

Utilize Delayed Price, or DP, contracts — also known as price later, NPE, etc. — to gain ownership of remaining in-house bushels. Given early producer selling of off-farm bushels, this might be less of an opportunity in 2026 than in previous years. Having ownership of bushels gives the commercial grain company the best flexibility to merchandise in Q4.

Don’t offer free DP from farm-delivered bushels unless the resulting basis position is desirable for merchandising objectives.

Farm-stored DP origination is a valuable tool for merchandising flexibility. But service charges, desired basis position and desired futures position should be market-based decisions rather than a producer wanting to create on-farm space.

Most regions had good merchandising opportunities in the 2025-26 marketing year due to good production and good producer sales of warehouse bushels. Finishing the marketing year strong sets a good foundation for the 2026-27 marketing year. Stay safe!

Curt Strubhar is a risk management consultant for Advance Trading, Bloomington, IL; 309-664-2326; cstrubhar@advance-trading.com.