GRAIN MARKET GLEANINGS

What is the ideal time to be sold out of a crop?
Although there are exceptions (like last year) the odds greatly favor wheat prices moving lower from spring to fall, says Betsy Jensen, who leads several marketing groups in Minnesota. “Based on statistics, you would have every bushel sold in the spring, prior to planting,” she says.  “I don’t know anyone willing to sell every bushel before they plant it, so the next best alternative is to sell out of the crop sometime in November, after harvest. The market doesn’t usually move very much during the winter months, and it’s better to take your money and run.”

Many farmers don’t want to sell out of their grain in November because of tax reasons, but a solution to that problem is to sell the grain for deferred delivery, maybe in Jan or Feb, particularly if there is a “carry,” or a higher price in out-month futures contracts compared to current prices. This won’t work in a market like soybeans, where there is no carrying charge, but it will often work for corn and wheat, Jensen says.

Uncertainty in the market about weather and new crop supply will be the likely cause of a spring rally.  If prices do rally this spring, be prepared to make sales, and make them quickly. “Spread out your risk this spring and make a few small sales, instead of waiting for the peak of a rally that might not materialize,” she says. 

Don’t hold your breath waiting for prices to defy seasonal trends; you might think that your wheat is worth $4, but that opinion won’t matter much if market dynamics dictate otherwise. “The only reason you raise a crop is to sell it,” says Jensen. “A grain bin is not intended to be a savings account.”

Free Commodity Charts Online
An excellent index of free daily, weekly, monthly, and historical grain pricing charts can be found online at http://futures.tradingcharts.com .  Click on the link “free commodity charts.”  Find a list of other marketing links at www. smallgrains.org.  Under “Useful Information and Links,” click on “Marketing Risk Management Online.”

Need Grain Marketing Advice?
If you’re not comfortable making hedging and trading decisions yourself, then consider hiring a professional marketing advisory service.  Under “Useful Information and Links” on www.smallgrains.org , click on “Grain Market Advisor List.”  It’s a listing of commercial market advisors that many producers in the Northern Plains call on for market advice and decision making. It is not a comprehensive list; indeed, it does not include the many experts at country elevators in the region who also assist their farm customers with marketing. Nevertheless, this list does provide additional professional contacts for you to consider in making marketing decisions.

Minneapolis Grain Exchange Marketing Hotline
Plug this number into your cell phone: the MGE marketing hotline, 800-827-4746, offers free recorded price quotes along with daily trader commentary updated each day after the market close.