Selling out of the field has paid off the last few years. "Last year, nobody sold anything, then we got a drought and the price of corn went up $3 in five or six weeks," says Jerry Gulke, president of the Gulke Group. "If anybody had cash contracting, they wish they hadn’t done that."
A recent Farm Journal Pulse asked: How much of your 2013 corn production is sold or priced?
Here are the results:
2013 Corn Production sold or priced
- None: 53%
- 1-25%: 24%
- 26-50%: 11%
- 51-75%: 4%
- 76-99%: 3%
- 100%: 4%
(1,600 respondents -- see the results on an interactive map)
We asked the same question at this time last year. Here are those results:
2012 Corn Production sold or priced
- None: 45%
- 1-25%: 30%
- 26-50%: 14%
- 51-75%: 7%
- 76-99%: 2%
- 100%: 2%
(1,400 respondents -- see the 2012 results on an interactive map)
"In all honesty, farmers have been right to not forward sell much of their crop," Gulke says. "If you don’t want to learn futures and options, you do nothing. And the last couple of years, the best thing to do was ignore everybody’s advice and sell out of the field."
But, this year is already different from 2012.
"Last year we had to take prices higher to curb demand," Gulke says. "And, this year we’re going into a crop where we’ve already terribly curbed demand. Exports are less than half. Feed usage is down. Ethanol is down. You’re starting out with a low expectation of demand."
He says that if a reasonably sized crop is produced this year, we will have an oversupply.
"We sometimes lose our focus when money has been too easy to make," he says. "I think that’s what we have in agriculture. You didn’t have to be a good marketer last year to make money. But, I think that’s changing."
Reports on the Horizon
On April 10, USDA comes out with its monthly Crop Production and World Agricultural Supply and Demand Estimates reports.
Gulke says the big news in this report will be where USDA decides to put the 3 million extra bushels of corn it found in storage with last week’s Grain Stocks report.
"Where will they put all those extra bushels of corn they found last week?" he asks. "Will they put it in feed usage, or just go right to the bottom line?"
Gulke says this "new" corn will actually put the U.S. ahead of where it was last year at this time in terms of corn usage. "And we thought we were going to run out last year," he says.
Hear Gulke's full audio analysis:
For More Information
See current market prices in AgWeb's Market Center
Read Gulke's Spring 2013 Top Producer column: Producers Need a Goldilocks Year
Wholesale Prices Favorable for Phosphates & Ammonia
USFR Weekly Recap - April 6-7, 2013