As you watch the markets in the weeks to come, this may be a good time to play it safe with your grain marketing.
With grain inventories high, perfect planting weather, and low prices, the situation for farmers right now is undeniably challenging. Is it time to sell? Wait for a rally? Pray for a weather event?
“It’s a time period when you don’t make any big mistakes,” said Bob Utterback, Farm Journal Economist and head of Utterback Marketing Services, on U.S. Farm Report on Saturday. “Try to keep your errors down.”
What does that mean? In Utterback’s opinion, it means preparing to take action on old-crop corn. “If you’ve got old-crop corn between the second week of June and the second week of July, you’ve got to make a decision about old crop and start moving it out,” he said.
The same goes for new crop. “It’s about the same time … if you haven’t priced by then, you are pretty much out of the pricing game clear to next spring, early summer,” he predicted.
Listen to an excerpt of Saturday's U.S. Farm Report marketing roundtable here:
Such reluctance to sell could expose you to serious downside risk, according to Utterback. “I can feel what is going to happen is everybody’s going to get into August, September and want to sell the cash and buy the board and be long the paper to place the market,” he said. “I think you have to be very cautious.”
Fellow panelist Gregg Hunt of Archer Financial Services agreed. “You have got to move this old crop corn,” Hunt said. “There’s not really going to be a catalyst here until we get into the summertime … If the crop is made, then you’re going to have to start moving two crops at one time, and that’s when you’re really going to see the market take a hit.”