Highlights
Who Has the Power in the Corn Market?
You have probably heard or read that farmers and grain elevators need speculators in the futures market. It is true, although most of us farmer types still do not have a fond attitude toward speculators, similar to the attitude people had toward bounty hunters in the Old West.
There are two corn markets, namely the cash market and the futures market.
If you have corn in the bin or expect to grow corn in 2025 but have not contracted the corn and have none sold in the futures market, your market position is long corn in the cash market. Long anything means the owner makes money if the price moves higher.
If you have unpriced corn in bin or in the field but have sold the same number of bushels in the futures market, you are hedged. You are long the cash market and short the futures market. A gain in one market is offset by a loss in the other market. That is the definition of a hedge.