Margin Minute: Decide How To Use Grain Bin Space

September 18, 2017 05:00 PM
 
 

When deciding how to use your grain bins this harvest, first evaluate any sales you’ve already made, advises Joe Vaclavik in a guest appearance on the Margin Minute at AgWeb.com.

“A lot of it comes down to one, what have you sold at this point, if anything?” Vaclavik tells “Margin Minute” host Chris Barron. “If you made some sales on that June/July rally in either market, I think a lot of guys made sales in soybeans. I think probably a lesser amount made sales in corn. … Deliver what you got sold. Mark that off. It’s probably going to be more soybeans than corn at this point, which is fine because the corn market offers a little bit better carry structure than the soybean market does.”

For the rest of your grain, consider “how long this market you want to be,” Vaclavik continues.

“You’re going to have to deliver it, but you’ve always got the option of reownership on paper,” he says. “From where I sit as a broker and as a risk manager, I want to make sure who I’m talking to understands exactly what they’re doing if they’re buying a futures contract or buying a call option.”

The carry in the corn market also has enabled some producers to forward contract bushels.

“There are much better prices available, at least on the board, when you go out into early 2018, even into 2019,” Vaclavik explains. “July ’19 is well above $4 even after the big USDA selloff.”

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