Short on Storage? Here’s How to Market Extra Bushels
With soybean harvest past the halfway point and corn harvest nearing it, you likely have a better idea of how many bushels you won’t be able to store on farm.
What should you do with those extra bushels? Matt Bennett, co-founder of AgMarket.net, and AgriTalk’s Chip Flory dig into the question:
First, take a realistic look at the markets, Bennett says. With December corn prices above $6.60 per bushel and November soybean prices near $14 per bushel, you could easily lock in profitable sales.
“There have been years when we would have given anything for $6.60 corn, especially on a year where in certain parts of the Corn Belt, you've got a phenomenal crop,” he says.
If you want to play around with a few bushels to shoot for the price stars, just be sure to limit your downside risk, Bennett encourages.
“At $6.60 corn, for example, you could spend 20¢ or 25¢ on a strategy and the worst you could do is only get $6.35 or $6.40 per bushel for your corn,” he says. “But, I don't want to get super cute with it; we need to be cautious not overcomplicate what can be an easy decision.”
For soybeans, Bennett says in most cases it makes sense to sell the bushels you can’t store on your farm.
“If South America has issues, there's no doubt you could see some really dynamic markets,” he says. “But for right now with prices of $13 to $14, I think selling them is a no brainer, especially if you have decent soybean yields.”
Corn Demand Based on Geography
A unique situation surfacing this year is the likelihood corn will need to be shipped from the East to the West, Flory says. For corn to jump the Mississippi and head West is rare.
A smaller corn crop in the West is the issue, Bennett says.
“The bottom line is you've got to get that corn out West where you've got cattle,” he says. “The only way you're going to be able to do that, of course, is with a high price. We've heard about folks getting anywhere from $1.85 to $2 over in our part of the world to ship corn out West.”
Read More
Soybean Marketing Decisions: Store Versus Sell
Jerry Gulke: Did the USDA Report Signal New Price Trends?
Check the latest market prices in AgWeb's Commodity Markets Center.
