Now that corn is trading approximately $1.50 off of its highs established last September, no doubt many people wonder what this market is really worth. At least subconsciously, most people make marketing decisions on a price comparison. Unfortunately, on the way up, the comparison is the lowest price of the last six months, and on the way down it is the highest price of the last six months. It’s how long we can remember. As Will Rogers once said, “I have a great memory, it is just short.”

It is of course also very logical to compare to your cost of production and that is of utmost importance in the long term. While that is always a factor, it is for many people secondary when making a marketing decision. Now let’s take a look at how logical comparing either to the low or high really is.

The long-term monthly chart of corn below shows an interesting story. If you look at the data of the last 10 years, nearby futures contracts have had a low of $1.86 and a high of $8.32. Quite dramatic. The midpoint of that range is $5.09; the top one-third is $6.17 and the bottom one-third is $4.01.

Now let’s look at a timing perspective. Since 2003 to the end of 2012 (10 years) nearby corn futures have spent 80 months trading in the bottom one-third of that 10-year price range and only 24 months in the upper one-third. That goes along with long-term history – markets always spend more time making bottoms than they do making tops. This one is not going to be any different.

So what do we compare to? One starting point is the midpoint of the last 10 years at $5.09. History would at least tell you making sales above $5.09 would at least put you in the upper half of the 10-year range – although $7.50 is a lot better!