While no one knows where the commodity prices are going, Mark Hobrock, director of sales for The Andersons, would put money on one market factor: volatility.
“Volatility will be here to stay over the next 60 to 90 days,” he shared on the May 6 episode of AgriTalk. Listen now:
Slow U.S. planting progress, global disruptions due to Russia’s invasion of Ukraine and a shrinking South American corn crop are just a few of the factors impacting the grain markets—and keeping prices elevated.
While Hobrock is bullish about the grain market outlook, he doesn’t think farmers should take a wait-and-see approach to marketing.
“Whether it is corn, soybeans, wheat, rice or cotton, you need to continue to have your plan in place and sell every tick up in prices,” he says. “I don’t know if that’s 20¢ up on corn and 50¢ up on soybeans, but the recent breakback in the markets show we need to be smart risk managers.”
Selling grain into rallies is difficult, notes Chip Flory, host of AgriTalk. To stay in the game, you can consider using a position to reopen price potential.
“I don’t think you should ever be 100% long a crop,” Hobrock agrees. “But we have to make sure we’re focused on our return on investments and make sure we’re making sales.”
Once the crop is planted, the focus will turn to yield potential, he says, which could provide another opportunity to make sales.
“I really like selling around that window of Father’s Day to July 4,” he says. “Obviously pollination could be kicked back a little bit this year, so maybe it’s closer July 4. But I think have a plan to keep selling up. When opportunities present themselves and let’s make sure we’re making some sales.”
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