“Know them and respect them. But don't let seasonal trends be your only pricing guide.”That’s Ed Usset’s advice about historic corn and soybean price trends. Except for Corn Belt drought years like 1988, 1995 and 2012, you’re more likely to see higher prices for corn and beans in March through June than from July on, says the University of Minnesota Extension grain marketing specialist. Today’s price volatility, however, creates massive spikes in prices that can provide great marketing opportunities virtually year-round.

“Should farmers pay attention to seasonal price trends, or has the world changed?” asks Usset. His answer – “Pay attention.”

“Seasonal price trends are rooted in the production cycle,” he says. “As long as we continue to plant in the spring and harvest in the fall, I suspect these trends will continue.”

For the most part, it remains a supply and demand issue most of the year. There are threats from cool, wet weather patterns in spring that can stall early crop growth. With a questionable supply, prices usually ease upward. But by mid-June, the size of the crop can often be estimated. In normal conditions, with a stable supply likely projected, prices start back down.

So in most years, growers should consider marketing a large portion of their corn or beans from March to June, says Usset. “More than likely, that’s going to pay off. On average, the higher prices for the year will occur during that period.

“But it will depend on how much on-farm storage you have,” he adds. “If you’re going to pay 5¢/bu./month to store grain, it’s probably not enough of a premium to pay for storage.”

The real question is what is a historic seasonal price trend? Says Jason Moss, marketing analyst for The Brock Report, Milwaukee, Wis. “Consider that for the 16 crop years from 1990 through 2005, 15 of those years saw the December corn futures’ low come after harvest (93.75%) and 13 saw the high come before harvest (81.25%). Thus, the odds definitely favored selling ahead.

“But then the ethanol, hedge fund and Chinese demand acceleration happened, turning the historical odds on their head,” he continues. “For the six crop years, from 2006 through 2011, none of the lows have occurred after harvest, and only half of the highs occurred beforehand.”

Of course, the drought-of-droughts seen this year means all bets are off. “No year ever looks average, but in the sum total of a decade, it all looks average,” Usset says. “Eighty-eight was a drought year. But the decade of the ’80s saw a seasonal average (that matched other decades).”

Usset has charted price trends to as far back as the 1960s. “The trends are remarkably similar for the ’60s, ’70s, ’80s, ’90s and ’00s, yet seemingly unpredictable from one year to next,” he says.

Drought years saw prices increase leading into harvest. That path was taken in 2010, when prices shifted, due to a shorter corn crop. December futures jumped from just under $4/bu. in June to over $6 in November. In 2011, prices were high in late August but dropped dramatically during harvest, before climbing again at the end of the year, due to tight supplies.

This year, with drought settling in after planting, corn futures prices surged from $5 to over $8. They stayed above $7 throughout harvest.

Moss says that even with greater volatility, farmers shouldn’t change their seasonal pricing program. “Seasonality is a longer-term trend, so the biggest downfall to marketing based on seasonal trends would be to override the program based on shorter-term reasons that make you question its current validity,” he says. “Changing the proportion of your crop that is marketed based on seasonality balances risk, but redefining seasonality in the middle of the marketing year or directly following an abnormal year adds risk.”

So although 2012 was a dreadful drought year, a projected return of an El Nino weather pattern is forecast, bringing the potential of more normal precipitation in the year ahead. For the remainder of this decade, seasonal price trends will probably resemble those of the past 40-50 years. You just have to watch for spikes along the way.