The harvest ending stocks are projections based on what we have and what many expect us to plant. They are not locked in concrete. Fall pricesinclude the risk premium that buyers are willing to pay to ensure product. Farmers who want to accept the risk can sell at these prices. As the season goes on and we know more and more about supply, the risk premium will be taken out and prices will more closely reflect what is actually being grown. It's just normal seasonals at work. If we get a drought or the trade war blows up, that will add new information and prices will adjust accordingly.
High prices in the spring don't mean high prices at harvest, as we all know. We can hedge by selling ahead or we can sit and wait and see what is on the table at harvest. If we hedge we're accepting the risk that we can deliver and if we wait we are accepting the risk that prices will move, usually down. It must be spring. 🙂
