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Plan Grain Sales, Estimate Expected Net Price You can estimate expected net prices for wheat, corn, soybeans and canola for any given months in the future, thus helping to plan sales and estimate the profitability of storing grain, using the tables on page 15 as a guide. Created by NDSU extension crops economist George Flaskerud, here’s how the charts work: In the first column, Calendar Month, pick months into the next year that are likely times in which you would sell grain, and hence, would like to estimate the net price you’d receive. The Nearby Futures Month and the Nearby Futures price for each corresponding calendar month are entered in the next two columns. In the Nearby Futures column, the settle price is entered using the closest futures month (Nearby Futures Month) to the Calendar Month in the first column. For August in the wheat example, that would be the Minneapolis September futures price on the day this chart was created, which was $3.36. Most daily newspapers publish the grain futures prices you would need to do your own sales planning charts. In the fourth column is the Nearby Basis, which is the difference between the futures and your local cash price. Here, enter your local average basis for each calendar month listed in the first column. In the wheat example, the basis in August at Hunter, ND is 27 under. Your local elevator would know these numbers. You can use last year’s basis numbers, or averages from the last three or five years. (See more basis information, including links to online basis charts, on pages 12-13). In the next column, add the Nearby Futures numbers with the Nearby Basis numbers to calculate an Expected Price. Thus, for August in the wheat example, the Nearby Futures price of $3.36 plus the Nearby Basis of -27 equals an Expected Price of $3.09. Next, subtract Storage Costs for each Calendar Month in the chart. There would be no storage cost if you sell off the combine. Use the Storage Cost estimates Flaskerud provides in these charts, your own storage cost estimates, or estimates from your local elevator, lender, or farm business management or extension educator. The final calculations give the results in the final column of the chart, Expected Net Price. The tables do not include an estimate for loan deficiency payments. After you’ve calculated the Expected Price for the Calendar Month in each row of the chart, an LDP amount could be added, if you indeed take the LDP on that grain. Here’s one final example from start to finish, estimating net price for soybeans selling off the combine, using the soybean sales planning chart: To figure the Expected Net Price for soybeans in the Hunter, ND area for the Calendar Month October, add the Nearby CBT Futures price – which on July 11 was $5.28. Subtracting the nearby Basis of -50, and with no Storage Costs, the Expected Net Price is $4.78. Note that these are only estimates to help with sales planning. Other factors such as quality premiums/discounts and government support income are not included.
Returns to Short-Term Wheat Storage at Hunter, ND
Returns to Longer-Term Corn Storage at Hunter, ND
Soybean Storage Not Profitable at Hunter, ND
Planning Canola Sales at Velva, ND
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