For months, farmers have been holding onto their soybeans in hopes of a price rally. The market is experiencing that rally now, and it is time to take action, according to Chip Flory and Brian Grete of Pro Farmer.
The two explained the importance of capturing this opportunity on Friday's Pro Farmer Profit Briefing.
“All winter and early spring, farmers have been saying they will make some sales when soybeans hit $9,” said Flory, editorial director of Pro Farmer. But now, because the price has gone higher than many expected, some farmers are waiting to market those beans in the hopes of getting even higher prices.
That's a mindset that Grete, editor of Pro Farmer, encourages farmers to reconsider--and fast.
“Is there more upside potential?" Grete said. "Sure, I think there is, but you have to take advantage of what the market is giving you right now.”
Here's what they recommend, depending on your situation:
If you have old-crop soybeans: Farmers with beans still in the bin need to aggressively make sales, according to Grete. "If this hangs on, you can reopen upside potential with long futures or call options.”
If you have new-crop soybeans: Farmers who intend to plant soybeans this spring also need to pay attention to this rally and respond appropriately. According to Grete, hedgers should be aggressive, but cash-only marketers need to be more thoughtful. “Either way, you need to take advantage of the unexpected marketing opportunity we’ve been given,” he said.
If you're reluctant to sell: Make sure you are making that decision for strategic, not emotional, reasons. "If you're not making sales, at least have a plan and the discipline to follow that plan," Flory said.
Watch the full Profit Briefing here: