Happy New Year! Have you made your New Year’s resolutions? Let me add one more to your list. You need a pre-harvest marketing plan for corn and soybeans in 2024. This is not a difficult resolution to act on. All you need is a minimum price objective, a few more price targets and decision dates to make it a real plan for action. Let me show you how I write a pre-harvest marketing plan.

Minimum price objective

I start by selecting a minimum price objective, which I consider the most important piece of a pre-harvest marketing plan. My minimum price objective reflects the estimated break-even cost of production in my part of the Corn Belt (southern Minnesota and northern Iowa). In 2024, I use minimum prices of $5.05 cash/5.45 Dec’24 futures in corn, and $12.40 cash /12.90 Nov’24 futures in soybeans.

The implied basis levels at harvest of 40 cents under in corn and 50 cents under in soybeans are consistent with southern Minnesota levels. As you write a marketing plan, adapt your minimum prices (i.e. production cost estimates) and expected harvest basis for your area.

For maximum price objectives, price targets reach $7.45 and $15.90, respectively, in Dec’24 corn and Nov’24 soybean futures. Do these prices look wildly ambitious? Relax – decision dates have a way making maximum price targets the least important piece of a marketing plan.

Decision dates

Decision dates in a pre-harvest marketing plan are dates when I price grain, regardless of whether or not I reached a price target, as long as the price is higher than my minimum.

Decision dates transform a marketing plan from a wish list to a real plan for action. I cluster decision dates in April, May and June because spring is often a good time to price grain. But don’t forget your minimum price objectives. I ignore decision dates if prices are lower than $5.05 cash/$5.45 Dec’24 futures in corn, or $12.40 cash/$12.90 Nov’24 futures in soybeans.

Pricing tools

The final piece of the plan is to address pricing tools “tbd” (to be determined). Should you price new crop grain with a forward contract? How about using futures or options contracts? This is a tactical question that cannot be answered until a pricing decision must be made.

If you see a strong and competitive basis for new crop delivery, a forward contract is a good pricing alternative. If not, futures and HTA contracts buy time for the basis to improve. If you’re willing to pay the cost, options offer upside potential. One more possibility is to use technical analysis to ride a perceived price trend higher.

Technical tools

Technical tools are imperfect, and the high cost of options is the reason I prefer futures or forward contracts early in the plan when price targets are close to break-even levels.

As of late-December, new crop futures are not up to my minimum pricing objectives. Dec’24 corn at $5.10/bu. is 35 cents below my $5.45/bu. minimum. Nov’24 soybeans at $12.80 are just 10 cents below my minimum.

Patience

Patience! Good marketing demands patience. It’s January, and a lot can happen in the next nine months.

These plans make no attempt to find the highest price (though I welcome the chance to stumble upon it). These plans will not eliminate the anxiety that comes with pricing decisions. My goal is to get insured bushels priced before harvest, and to achieve a good average price for my 2024 crop.

2024 Pre-harvest marketing plan for corn

With an expected production of 100,000 bushels in 2024, I will buy crop insurance and have 75% of my anticipated corn crop priced by mid-June.

2024 Pre-harvest marketing plan for soybeans

With an expected production of 27,000 bushels in 2024, I will buy crop insurance and have 75% of my anticipated soybean crop priced by mid-June.

Both plans started on January 1, 2024.

Ignore decision dates and make no sale if prices are lower than the initial/minimum price objective in each plan ($5.05 cash corn price/$5.45 Dec. futures. or $12.40 cash soybean price/$12.90 Nov. futures.)

Exit all options positions by mid-September 2024.