Stick to your marketing plan and be on the lookout

As we head into September, the weather, economy and harvest create marketing opportunities and risks.

Traders will now be looking to the harvest and buyers could wait for a setback to add to their needs, creating the possibility that the markets will sell off until we see what the combines are telling us about the yields.

The base has held up well of late due to limited supply from the old crop, giving growers a chance to add pre-harvest sales.

Corn remains favorable if demand continues. There appears to be potentially a large national bean crop and very little incentive to stockpile beans without transportation to market and in the face of a potential record harvest in South America next year. Growers should consider selling beans now or off the combine and buying them back on paper in March or May in case South America has weather issues.

With the potential corn supply, most expect a post-harvest recovery. There is also little to no carry in the corn market and the potential for a 40 cent drop in the crop. Growers should consider increasing sales now, even if you plan to deliver in January, to take advantage of the basis and the price. Paying for storage doesn’t make much sense with little transportation to help offset the cost. Consider selling, buying back on paper and transferring your risk.

Marketing continues to be a challenge as the headlines change almost daily. Uncertainty remains over what will be exported out of Russia and Ukraine. China and global economies continue to struggle, raising concerns about demand for raw materials, and global weather conditions remain less than ideal for the upcoming South American crop year.

What you can control is when and how much you sell. Stick to your up-sell plan and keep your overall average price in mind. Also be sure to pay attention to next year’s harvest. If South America planted more and managed to avoid dry weather, November 23 beans could be a good value. Also, December 23 corn over $6 is a good place to start the futures sell.

The next big market mover will be the USDA’s September supply and demand report, which was released today. Then the markets will focus on the harvest and the final yields.

About the Author: Cathy Ekstrand is Senior Market Advisor at Total Farm Marketing by Stewart-Peterson. During his 17 years in office, Ekstrand has provided the kind of agricultural marketing service and advice that is essential to a long-term advisor/client relationship. She combines this advice with a warm, personal and firm touch to help her clients pull the trigger on the decisions that matter to their success. If you have any questions, you can contact Ekstrand at cekstrand@s-pelmwood.com.

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