3 Grain Marketing Steps to Take Now

May 24, 2019 07:00 AM
 
You can’t afford to hit pause on your marketing plan. Here are a few grain marketing strategies farmers should implement now.

Feeling overwhelmed and exhausted by the grain markets? You’re not alone. The last year has provided an endless parade of kneejerk and what-just-happened moments.

But you can’t afford to hit pause on your marketing plan. On a recent episode of AgriTalk, Matt Roberts, founder of The Kernmantle Group, an economics research and training firm, provided grain marketing strategies farmers should implement now.

Watch the price spreads. 

Spreads, or the difference in price between two futures contracts with different contract delivery months, are one of the most important factors to watch in the grain markets, Roberts says. Currently the December 2019 corn contract and the December 2020 corn contract are trading at similar levels. 

“What it tells us is the market right now thinks there is some demand growth going to corn, and if we can pull this year's crop down, then we're going to be a tighter scenario, which gives us some prices,” he says. “I also think it's indicating some time there in 2020, we're going to see a lot of this trade stuff get resolved, and we're going to see those markets open up.”

As a result, he says, U.S. corn acreage and overproduction pressure that’s weighing on the market now will lessen.

Use the weather market uncertainty to your advantage.

“Right now, you have a lot of guys who are pulling back because either they think prices are going higher or they're not sure that they're going to get their crop in,” Roberts say. 

Use this market uncertainty to price grain.

“For all these people out there sitting on old crop, this is a godsend,” he says. “Start cleaning out those bins. We could have two weeks of good weather forecast and come out tomorrow and prices drop.”

Roberts also encourages farmers to make new-crop sales. “I'm a big believer, you put your price targets in, and you just leave them in,” he says. 

Don’t be greedy. 

Remember just a few months ago when you would have jumped at the chance to sell $4.10 corn? 

“Now they are sitting here thinking, ‘I don't know, we can go higher,’” Roberts says. “I call them Tiger Woods marketers—they can’t be content because there could be something better.”

Factor in your current yield expectations, crop insurance coverage and cost of production, Roberts says. Then, if current prices create a profit for your farm—sell some grain.

 

Check current market prices in AgWeb's Commodity Markets Center.

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Comments

 
Spell Check

samr
rural, WI
5/24/2019 09:49 AM
 

  I agree with George,All farmers want is a fair price.Were not asking to get rich but shoul pd prices that reflect true cost of production.Ever go and price a new combine or tractor.or should we go back to horses.Maybe the grain traders and everybody who buys our commodities are greedy, they want to make the money.by not paying our true cost of production

 
 
george
rural, MN
5/24/2019 07:34 AM
 

  Let me see.Farmers are not selling there commodities at below the cost of production,Now there greedy.

 
 
Richard
Blacksear, GA
5/24/2019 09:50 AM
 

  U stop reading he said if there was profit

 
 

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