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Get Your Grain Bins Ready

July 5, 2013
By: Jen Russell, AgWeb.com Managing Editor google + 
grain bins eastern mo
  

With corn prices uncertain, farmers should consider stashing their grain and biding their time.

USDA rattled the markets when it increased its planted acreage estimate for corn. According to its June 28 Acreage report, farmers have put 97.4 million acres of corn in the ground. Since then, corn prices have been on the downslide. Futures hovered around the $5 mark this week, and some analysts are saying they could dip even lower.

"It's going to take some weather challenges to move the markets here moving forward," says Iowa farmer and AgWeb margins expert Chris Barron.

With such a bleak market forecast, what can you do to get the best price for your crop? Barron says it will be important to watch the markets closely and be ready to take action.

Hear more from Chris Barron:


Watch the Markets

  • Pay attention to crop condition. This will be especially important for soybeans, Barron says. "Keep an eye on weather hurdles during pollination and during the fill period."
     
  • Pay attention to market psychology. "Know your cost of production, and if there are some opportunities you're willing to take advantage of, be able to step in there and do that," Barron says.
     

Ready the Bins

"This is going to be a year to use your grain bins," Barron says. "I would be out there getting the best grain bins ready to go, because I think there's going to be some basis opportunities, some carry opportunties. This is going to be a year to harvest it, fill everything up, and take advantage of the carry."

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RELATED TOPICS: Corn, Soybeans, Marketing

 
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COMMENTS (2 Comments)

Todd - Tulsa, OK
Farmers wouldn't have to worry or bother w/ storing their grain if they just did a better job of marketing. For example, for this year's new-crop Fall Dec '13 corn the high (so far) was set last August (Copy/Paste in your web browser --> http://www.agweb.com/markets/futures.aspx?page=chart&sym=ZCZ13&name=Corn&domain=agweb&display_ice=1&studies=Volume;&cancelstudy=&a=W )
by looking at the web site chart address above you can see that the Dec '13 corn contract got up to a high of /- $8.40. That is when farmers should of sold 2013 new-crop corn w/ a hedge to protect against yet even higher prices just in case of a S. American drought last Winter or a U.S. drought this year. Likewise, for this year's new-crop Fall Nov '13 soybeans the high was also put in around the same time in late Aug/early Sep near /- $18 (Copy/Paste in your web browser --> http://www.agweb.com/markets/futures.aspx?page=chart&sym=ZSX13&name=Soybeans&domain=agweb&display_ice=1&studies=Volume;&cancelstudy=&a=W ). Everyone knew at the time that the highs were put in for old-crop '12. And if the highs were in for the '12 crop they were also in for the '13 crop as long as nothing else disastrous happened, which so far as not nor does it look to happen. So you would of had $8.50 or $18 for your selling price minus the premium cost of the option in order to hedge which I am sure would of been better than current prices now & certainly higher than any $3-$4 or $11-$12 this Fall w/out any weather scare. Also w/out storing you get your money in the Fall & then if you want to you can put it out on interest (I realize any interest paying investment is low currently). If you store you have the opportunity cost of not getting your money until Spring, Summer, etc. Back in the 1950's, 1960's when my Dad & Grandad farmed corn & soybeans on the CBOT may move 1-3 cents pr. day. You could either get $1.00 to $1.75 for corn. Today & from hereafter due to ethanol, bio-diesel using so much corn & soybeans etc. there is way more volatiliy in prices. Now it is routine for prices to move limit up/down in one day/successive days. Due to this extreme volatility which seems to be w/ us for as far as the marketing eye can see....FARMERS (AND END-USING COMPANIES) HAVE TO DO A MUCH BETTER JOB OF MARKETING. But certainly for this year, it is crazy to have to go to the extra work to put in/take out your grain in storage if only you would of priced your this year's '13 crop back in Aug/Sep of '12.
10:14 PM Jul 7th
 
Todd - Tulsa, OK
Farmers wouldn't have to worry or bother w/ storing their grain if they just did a better job of marketing. For example, for this year's new-crop Fall Dec '13 corn the high (so far) was set last August (Copy/Paste in your web browser --> http://www.agweb.com/markets/futures.aspx?page=chart&sym=ZCZ13&name=Corn&domain=agweb&display_ice=1&studies=Volume;&cancelstudy=&a=W )
by looking at the web site chart address above you can see that the Dec '13 corn contract got up to a high of /- $8.40. That is when farmers should of sold 2013 new-crop corn w/ a hedge to protect against yet even higher prices just in case of a S. American drought last Winter or a U.S. drought this year. Likewise, for this year's new-crop Fall Nov '13 soybeans the high was also put in around the same time in late Aug/early Sep near /- $18 (Copy/Paste in your web browser --> http://www.agweb.com/markets/futures.aspx?page=chart&sym=ZSX13&name=Soybeans&domain=agweb&display_ice=1&studies=Volume;&cancelstudy=&a=W ). Everyone knew at the time that the highs were put in for old-crop '12. And if the highs were in for the '12 crop they were also in for the '13 crop as long as nothing else disastrous happened, which so far as not nor does it look to happen. So you would of had $8.50 or $18 for your selling price minus the premium cost of the option in order to hedge which I am sure would of been better than current prices now & certainly higher than any $3-$4 or $11-$12 this Fall w/out any weather scare. Also w/out storing you get your money in the Fall & then if you want to you can put it out on interest (I realize any interest paying investment is low currently). If you store you have the opportunity cost of not getting your money until Spring, Summer, etc. Back in the 1950's, 1960's when my Dad & Grandad farmed corn & soybeans on the CBOT may move 1-3 cents pr. day. You could either get $1.00 to $1.75 for corn. Today & from hereafter due to ethanol, bio-diesel using so much corn & soybeans etc. there is way more volatiliy in prices. Now it is routine for prices to move limit up/down in one day/successive days. Due to this extreme volatility which seems to be w/ us for as far as the marketing eye can see....FARMERS (AND END-USING COMPANIES) HAVE TO DO A MUCH BETTER JOB OF MARKETING. But certainly for this year, it is crazy to have to go to the extra work to put in/take out your grain in storage if only you would of priced your this year's '13 crop back in Aug/Sep of '12.
10:14 PM Jul 7th
 



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