Have the last two crop years of soaring prices made you a lazy marketer? There is no doubt that selling your crop is a tricky thing to do. It comes with loads of stress and is definitely one of the hardest jobs a farmer has. However, with the $5.50-7 corn and $13-15 soybeans we have seen over the last two years, marketing may have been a little easier for most. Even being 50+ cents away from the highs of the market didn’t hurt too bad. One negative to these higher prices may be how they have affected how farmers approach marketing. Did we pick up unhealthy habits over the last couple of seasons?

Through speaking with other farmers or looking at your own sales for 23’s crop, you may realize that there aren’t as many sales on the books as usual. In previous years, a typical percentage sold may be 30% before planting and 50% once you see it off to a good start. The same farmer this year may be only 10% and 25% sold at those same times. So, what’s the difference? Many people have become too used to the higher prices. The last time we were at $5.14 on December ’23 corn futures (where we are as of this typing) was January.…of 2022! That was with December ’23 futures still having almost 2 years of time before it goes off the board, meaning the world had close to 2 years to figure out its supply issues.

It is easy in times like this to lock up and not make a sale. The last time most farmers made a new crop corn sale was the beginning of the year. At that time, we had a month or two where one could get $5.90-6.10 futures. Since then, we have fallen 90 cents and originators at your local elevator may be wondering if their phones are working. You may have recently heard people say, “I’ll sell some more corn once we get back to $6.” Who says we have to go back to $6? They may be waiting a long time and then be forced to sell everything off the combine at $4.50 futures. Or maybe the market does get back to $6, they sell as much as they can, and then watch the futures rally to $7.50 because the U.S. has a short crop, and the grain corridor deal doesn’t continue. The point is, no one knows where this market is going. Mother Nature, political leaders, and the macro economy are going to have a lot to say about the price of corn and soybeans before fall comes around.

One way to prevent yourself from locking up and waiting for the market to do what you want it to, is to use options. Puts and calls give you the flexibility to know your worst-case scenario price wise but remain open to capitalizing on potential rallies. In a year where, before the growing season really started, there has already been a $1.08 range in December corn futures and a $1.98 range in November soybean futures, flexibility in pricing is extremely valuable. Don’t continue to sit on the sideline and get a headache every time you look at the markets. Take control of your marketing plan. Use the time after planting season to learn about options and how to use them in volatile markets. Anyone can understand puts and calls with the right information or a good teacher.

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The opinions of the author are not necessarily those of Farm Futures or Farm Progress.