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Set a Plan, Let Market Determine Pace
11/19/2009
Progressive Ag has a rather simple approach, says the company’s Randy Martinson. “We look at what the monthly price chart has done for the past 13 years and price when the market is in the top third of that range.”
They’ll price as much as 18 months ahead of harvest, in increments small enough that producers will be willing to follow the advice.
They also tend to use fixed-price or hedged-to-arrive contracts early in the game, when the longer period could mean larger margin call requirements on futures hedges.
“We adjust the speed at which we make sales depending on how the market is acting,” Martinson explains. For the 2009 crop, that meant speeding up sales, “especially for soybeans, because we expected more acres to be planted,” he says. “At the same time, strong early demand put bean prices at a significant premium to corn, making sales more attractive.”
Key Market Factors
> The strength in the dollar seems to be over.
> Big crops are being binned slowly.
> Strong usage keeps stocks from growing much.
Percent Sold and Market Value on Oct. 1, 2009
Click here for the Adviser Track Records Table
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2010
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