Expert discusses corn financial strategies, including sales, markets and basis, along with pros and cons of corn storage.
After a brutal season last year, ravaged by Hurricane Helene damage, drought and economic woes, farmers were looking forward to a stronger corn crop and better prices. But those dreams fell short amid a dry summer and shaky economy. North Carolina State University Professor and Extension Specialist Nick Piggott shared his thoughts on how farmers can make the most of a less-than-bumper corn crop, and what areas may assist them in weathering this metaphorical and literal storm. Piggott talked about financial strategies, including sales and markets and how basis plays a part. He also touched on the pros and cons of storage.
How can North Carolina farmers navigate this year's record U.S. corn crop?
Scale sales into strength -- sell small slices on futures or basis rallies (or both). Make the first sale cover bills, then stair-step price targets higher to lift your average; with yield still uncertain and reports lagging, any futures bounce or basis pop in North Carolina from lower yields or transportation issues on imports can add value.
Will basis and the local livestock sector help?
Yes -- local feed demand lifts basis in North Carolina's corn-deficit market. It's a buffer, not a bailout -- smooth rail from the Midwest can cap the premium -- and timing matters: basis typically improves after harvest, especially if yields disappoint locally or in the Midwest, making local bushels more valuable.
Is storage the answer?
Robinson and Piggott (2025) demonstrate that returns to storing corn in North Carolina typically originate from the futures carry (the spread between harvest futures and deferred futures contracts) compared to the basis carry (the spread between harvest basis and deferred basis). With record corn production in the Midwest, the future spreads are currently thin: from the 2019/2020 through 2024/2025 marketing years the March and May corn contracts averaged about 31 and 54 cents above the preceding December (harvest) contract, but on Oct. 10, the March 2026 and May 2026 corn contracts were only about 16 and 25 cents above Dec. 2025 -- roughly half as large.
The key takeaway: storage is likely to pay this year only if significant transportation problems tighten local supplies and lift cash bids, creating significantly higher basis carries. North Carolina still needs to import around 130-150 million bushels, and freight-driven basis premiums are unpredictable; therefore, relying on storage to pay this year is still possible, but is made less probable given the current futures carry has been clipped by expected record Midwest production.
Is forward contracting the answer?
With futures and basis both weaker currently, forward contracting right now isn't the answer (don't lock two weak legs) -- make a small sale to cover bills, then wait to fix at least one on strength (ideally both). Use puts or minimum-price contracts for downside protection, and only forward contract deferred bushels where carry minus all storage costs is clearly positive; a hedge to arrive fits if you expect basis to improve later.