Short Crop Pushes Sales Higher

October 31, 2012 06:54 AM

Corn sales outpace soybeans on tail end of harvest

As prices slid during harvest, corn sales climbed for the advisers in the Archer Financial Services, Inc., Ag Hedge program. There were also several soybean sales, but the net change pace was limited. Some used the break to lift hedge protection and even add re-ownership strategies as bean values dropped more than $2.30 from late summer highs. September corn sales jumped 15% for 2012 crop, as advisers took advantage of strong basis levels and lack of carryover, recommending producers move inventory straight from the combine.

"We’ve been extremely aggressive in both corn and beans," notes Richard Brock of Brock and Associates. "We have a short crop, and you never store a short crop. The highest prices in a short year are seen right after harvest. We wanted to be as heavily sold after harvest as practical."
With premium prices and no carry in the market, there are too many reasons why a producer shouldn’t store corn, Brock adds. "Short crops peak early and have a long tail. Owning corn and soybeans when prices are this high, the odds are stacked against you," he explains.

Interest in selling the 2013 crop has been tepid; however, those sales did move 8% higher in September to 30%, says Scott Harms of Archer Financial Services. Soybean sales for this year’s crop decreased by 3% while the 2013 hedge position inched 2% higher in September. "With corn and beans off of their summer highs as harvest winds down, it is expected that sales may begin to dry up in anticipation of a potential cash-led rally this winter," Harms says.

p40 Short Crop Pushes Sales Higher chart


If you have any questions or comments regarding the track record information, contact Mark Soderberg, Tim Smith or Scott Harms of Archer Financial Services, Inc., at (800) 933-3996.

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