Marketing

Remember just a few short weeks past when harvest 2015 corn was trading around 365 in Chicago? Have you noticed this same crop  is now trading in the 400 neighborhood? Similarly, 2015 harvest soybeans were recently at 900 and now sit near 990. Although the local cash prices  for new crop have not responded quite as dramatically, there have still been some real positive movements. We could talk for ½ day about why this happened or what will happen next.

My point here is:
•    When corn was dropping from 375 – did you wish you had more new crop priced?
•    New crop corn is now back above 400.
•    Have you priced additional bushels now?

With your crop progressing every day, the cost-of-production becomes more certain, which allows you more confidence in your breakeven point. Who knows where the average cash price of 2015 crops will end up? I certainly don’t and I’ve not yet met anyone that does.

I do not remember who said this but it rings true for me so I will share. “Unless a grain producer is 100% certain the price is going up – they should have some portion of their crop priced.” An example might be that if I am 50% certain the price is going up I might have 50% priced. Or looking at it another way; if I am 30% priced, I must be 70% certain the price will go up.

Source:psu.edu