Old-Crop and New-Crop Price Gaps
Old-crop and new-crop prices answer different seasons. A wide gap is a clue about nearby tightness, not a promise.
Old crop is grain from the harvest already in the bins. New crop is grain from the harvest still ahead, or just arriving. Their prices can sit far apart. The gap is a spread between two seasons, and people narrate it as if it were a personality trait of the market. It is a pair of prices. You can learn from the pair only if you know which crop you actually hold. The futures version of a nearby-versus-later slope is discussed at https://goodsandgrain.trade/futures-curve-carry-and-storage.
Why the two prices diverge
Nearby grain can be scarce even when the next harvest looks large. Users who need wheat or corn before the combines roll will pay for what exists. The new-crop price, meanwhile, reflects acres, weather risk, and the time between now and delivery. When the next crop looks comfortable, new-crop prices can lag a tight nearby market. The reverse happens when the next crop is the one in trouble and nearby bins are full. Neither pattern is permanent. Both can change with a weather week.
The cash bid you are offered may follow one season and not the other. Ask which crop the bid is for. Delivering new-crop grain into an old-crop contract, or the reverse, is a quality and a contract question, not a clever arbitrage, unless the contract allows it.
The gap is not a storage wage by itself
A high old-crop price beside a lower new-crop price often says: do not sit on grain the market wants now. It can also say the opposite of a carrying charge. You are not being paid to store into the new crop. You may be paid to move. Your own bins still matter. If the grain is the seed of your next sale only because you have no other cash, run the arithmetic in the spot-versus-later note at https://goodsandgrain.trade/cash-sale-versus-deferred-delivery.
A wide new-crop discount does not mean the new crop will stay cheap. It means that is the price on offer for that delivery. Selling some new crop because the price pays your costs can be sane even while old crop is tighter. They are different bushels.
Basis can disagree with the spread
Futures can show a dramatic old-crop, new-crop gap while your local basis is asleep, or the reverse. A mill that is covered nearby will not pay an old-crop futures spike just to make the spread look tidy. Build the cash price from futures and basis before you haul. That build is at https://goodsandgrain.trade/how-elevators-build-a-cash-bid. Comparing two futures months and calling it your cash choice skips the local piece.
Charts of a single month will not show the gap. You need both months, and you need to know which symbol is which. Reading a chart without that care is covered at https://goodsandgrain.trade/reading-a-grain-price-chart.
Contracts and the crop year
Look at the shipment window. A sale for June and a sale for November may be different crop years even if you signed them on the same day. Hedging each with the matching futures month keeps the offset in the season you sold. Hedging both with the nearby month because it is the one you watch is how a spread move becomes an unplanned gain or loss.
If you roll a hedge from old crop into new crop, you are changing seasons, not just clerical months. Treat that roll as a decision. Rolling mistakes are listed at https://goodsandgrain.trade/mistakes-rolling-a-futures-hedge.
Write two lines
Line one: bushels I have, bid for the window I can deliver, net of discounts. Line two: bushels I might grow, bid for the new-crop window, and what happens if I grow less. Decide each line on its own. The gap between them is context. It is not an order to hold or to sell.
Frequently asked questions
If old crop is far above new crop, should I empty the bins?
It is a reason to look hard at selling grain the market wants now. It is not an order. Check basis, your cash needs, and the actual bid.
Can I fill an old-crop sale with new-crop grain?
Only if the contract allows that crop year. Otherwise you may be delivering the wrong season's spec.
Does a narrow gap mean the two crops are the same trade?
No. A narrow gap is also information. The windows, the basis, and the bushels you have are still different facts.