The Farm CPA
Paul is now part of the fourth generation in America that is involved in farming and hopes the next generation will be involved also. Through his blog he provides analysis and insight to farmer tax questions.
Corn & Bean Prices are Approaching the Spring Price
May 29, 2013
As I type this post, December corn futures are currently trading at $5.59 and November beans futures are at $12.84. Both of these prices are within a few pennies of the spring price that was set based on the average February prices of these futures contracts ($5.65 and $12.87, respectively). It is interesting that after 3 months of trading that both contracts are within this range.
Now that these prices are getting back to these levels, are you upgrading your 2013 crop budgets to determine if you need to hedge any of your bushels that are not covered by crop insurance. Although weather may push prices higher, a couple of weeks of good weather can push them lower too. We are not recommending a hedge, but rather, check your budget to see if hedging part of your crop at these prices makes sense.
We see too many farmers that try to get $13 or $8, when the price is with a few pennies of this price and a month later, the price is a $1 or $2 lower.
Remember, you are in the farming business and when you can hedge in a good profit, it may be prudent to do.