October 25, 2016

November is a busy time on the farm. You may still be harvesting the 2016 crop, or you may have completed harvest. Either way, now is a good time to make sure your 2016 grain marketing is in place and start contemplating your 2017 strategy. Here are six tips from grain marketing consultant Matt Bennett, who provides expert advice for Channel Seed customers.
1) If you’re done harvesting: at this point you should be looking for basis and evaluating how much carry there is in the market.

BOTTOM LINE: The big 2016 corn and soybean crops are likely getting bigger, which will weigh on prices following a brief postharvest rally unless Chinese buying stays strong or weather fears emerge in South America.
“I recommend farmers sell the carry in the market for their bins at home, as they’re essentially acting the same way a grain elevator does,” says Bennett. “In essence, every time the basis improves from there on out, if the growers have a hedge on the board they will participate in the basis getting better as well as getting a decent profit on their corn.”
2) If you’re still harvesting, decide whether to store or sell your grain.
“I’ve been advocating for farmers getting more creative and potentially selling their grain across the scale and then looking to re-own their crop on paper,” says Bennett. “This way, the corn is sold and the growers have a price ‘floor’ underneath them, but if there’s a market rally they can participate in that.”
3) Planning ahead for 2017
It’s important to keep 2016 and 2017 grain marketing strategies separate. Always look at next fall’s prices when you’re making planting decisions.
“Far too often, people base planting decisions on what they made this crop year without looking at any of the risk of what prices might do for the 2017 crop,” says Bennett. “If I’m making a decision about 2017, I need to be doing some risk management based upon those prices.”
4) Still lots of grain to be sold in 2016
Expect to see a lot of grain being sold through the rest of 2016. Bennett says it has been one of the toughest grain marketing years he’s ever experienced.
“We had long-term forecasts pointing to a hot, dry summer that could have potentially caused major rallies in the markets,” says Bennett. “We had a hot, dry June but then in July it started raining and just didn’t quit. Folks were scared to sell too much grain, and nobody wants to sell grain too cheap so a lot of people held onto their grain. In addition, we had very little corn sold going into harvest, so there’s still a lot of corn, in particular, to be sold yet this year.”
5) Keep breakeven pricing up to date
“First and foremost, make sure you keep your breakeven pricing up to date,” says Bennett. “It's tougher to take advantage of year-end rallies if you don't know at what levels you can be profitable. “
One tool available to growers is Bennett’s Profitability Calculator, available at Channel.com/markets. The calculator is a valuable tool that helps growers figure the cost of production and calculate breakeven prices in a simple format.
“For planning your 2017 strategy I encourage growers to evaluate breakeven pricing twice a month or even once a week; you can’t do it too often,” says Bennett. “Recalculating your breakeven pricing will help you map out the rest of 2016 and create a grain marketing strategy to help take advantage of early season rallies in 2017.”
6) Other keys to successful grain marketing in the year ahead?
Keep an eye on the South American market. “It’s a global marketplace,” says Bennett. “If they have issues getting planting done or experience weather issues during the growing season, that’s going to have a large-scale impact on our markets here.”
In addition, the new Channel Population Optimizer can help growers optimize profitability in 2017. Visit Channel.com/PopulationOptimizer to help determine crop planting populations, in just a few easy steps: 1) Choose your corn product. 2) Input your seed information and grain price. 3) See your estimated profitability by recommended planting rate for your local area.
To learn more about Bennett’s recommendations, sign up for his e-newsletter at channel.com/Markets. The e-newsletter contains exclusive content plus tools and tips to turn Bennett’s advice into actionable business decisions. To learn more about Channel and find your local seedsman, visit Channel.com.
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