Market rallies seem to show up at the least opportune times. While your focus is elsewhere, such as in the field planting, along comes a nice price bump that suddenly appears and then leaves just as quickly. That scenario is a common occurrence. It was certainly the case this past year, when many farmers and analysts anticipated a summer rally.
“If 2018 taught us anything about marketing, it’s to pay attention to price and not time,” said Ken Smithmier, ClipperData director of market research. “We peaked the market really early last year, and we could certainly do it again [in 2019].”
Market rallies during planting season are common, according to Joe Vaclavik, president of Standard Grain. “A lot of times your best basis opportunities of the year may present themselves during planting,” he said. “There have also been years when the best futures prices presented themselves during planting.”
Vaclavik and Smithmier shared their recommendations on marketing during the planting season in a recent “U.S. Farm Report” segment with News Anchor, Clinton Griffiths.
Since there’s no magic formula to help you determine when market opportunities are going to show up, you have to be prepared to take action daily, Vaclavik told Griffiths.
“If you’re a farmer marketing grain, you should spend at least a good 15 to 20 minutes every single day looking at your marketing plan, examining the markets and keeping track of what open orders you’ve got working and what kind of inventory you have,” he said.
“I’m going to try and keep my eye on prices and profit margins,” Vaclavik added. “Just remember, the news tends to follow the markets, so don’t pay too much attention to any kind of weather scare or any type of news that’s going to get you off the rails in terms of your game plan.
I think we will see the market rally—just be ready.”
In any year, and especially this one, that’s good advice for all of us.
