It’s not about high or low to lock in profits, they sell futures well in advance to eliminate uncertainty and hedge their naturally positive position. The speculator buying the future takes on that risk.
Generally you hedge only about 70% of the expected crop, and then place insurance on that 70%. In a bad year you break even, and you get all the excess in a good year.. also the hedging is not all at once. Farmers are already selling contracts for their 2023 corn crop, but typically only 10% right now. They will contract more and more out over time has harvest grows closer. You have a good idea what you harvest for your 2022 crop by now, so you can contract closer to 100% if you can find a buyer.
