Agricultural markets have not been a fun topic over the last several months.

A year ago, we saw December 2023 futures just below $6 and November 2023 futures right around $13.60. Compare that to this year’s new crop prices of $4.75 and $11.90. Many farmers are sick and tired of seeing consecutive down days in the markets and have all but stopped paying attention to them.

We find several people stating there “has to be a bounce,” and they are willing to bet half of their old crop and all their new crop on it. What happens if there is no bounce? What happens if we are all just dead wrong?

Instead of waiting and hoping for the best, let’s take some action. I believe we should focus on what we can do today, specifically on the soybean side of things.

It is common for operations to market corn and soybeans hand in hand, meaning that when we get sick of the corn market, we forget to look at what can be done with soybeans. Yes, they have both dropped well over a dollar year over year, but percentage wise corn is down 20.8% compared to soybeans being down 12.5%. Beans are still hovering right around that $12 mark, which pencils out a lot better than the $10-$10.50 area many private companies are projecting for the 24/25 crop.

The last time we saw carryout over 500 million bushels was the 19/20 marketing year, when the U.S. farm price was $8.57. Obviously, the trade with China was a big factor there, but it goes to show that we could drop a lot further from this $12 mark. Enough with all the doom and gloom. What can be done today?

Related:2024 acreage battle: A game of marginal shifts

A soybean marketing sample

Let’s look through a marketing plan for a farmer who is projected to produce a nice round number of 100,000 bushels of soybeans in 2024. He wants to be 100% marketed/covered before planting a seed and implements four different strategies to achieve this:

Related:War and bitter cold rock corn and soy cash markets

These positions together provide a complete marketing plan and have you 100% covered to the downside, leaves you with some upside potential on 50%, and another 25% of unlimited upside potential. Say if the market does crash to that $10.50 area we discussed, this farmer would receive an average price of $11.43. If the market rallies higher and we see futures at $14, this farmer would receive an average price of $13.03.

Market to your style

The positive about marketing your crop with options is that you can tailor them to your specific wants.

After just a few conversations with the right risk management advisor you will easily understand how to utilize options and what strategies are meant for your operation.

Don’t wait for the markets to improve because they “have to bounce.” Set up a marketing plan that provides some comfort for you in case we never see that bounce – or if the bounce comes after we already dropped another dollar or two.

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