April 3, 2023
"Grain marketing is simple, it’s just not easy," is Ed Usset’s mantra. So much so, he wrote a book with the same title. The University of Minnesota marketing specialist shares his insights, tips and experience in the grain marketing industry in our free guide: How to get the most out of your grain marketing plan.
Cash grain market pricing tools
Usset compares the “most basic of cash pricing tools”: making a cash grain market sale and holding unpriced grain in storage. Sharing the pros and cons, he offers grain marketing strategies, like a simple cash sale, and where the opportunities and risks lie when using that strategy.
He also covers the basics of a forward contract, and the opportunity to price next year’s crop.
You have a grain marketing plan. Do you have the discipline needed to execute the plan? While those plans can feel constraining, using technical tools can offer some flexibility in those plans. Trend-following tools are readily available and can offer an objective answer.
Download the free grain marketing guide
Using those tools is effective in strong trending grain markets, but can fall short in markets stuck in a narrow trading range, Usset warns. While there is always risk involved, the trend-following tools and technical analysis offer a disciplined way to chart your grain marketing plan.
You need something to aim for. Start with an initial price target of a breakeven cost of production and move forward from there. And take into consideration pre- and post-harvest scenarios.
Think big, says Usset, but be realistic.
Decision dates are critical to grain marketing, Usset explains. They turn a simple grain marketing plan into tactics for real action. And they take different considerations, depending on time of year, just as price targets.
You must be ready to make the sale, even if the price target isn’t met. While that can be a struggle at times, decision dates help avoid the pitfall of holding grain in storage too long.
Usset also offers suggestions for the best time of year to choose your dates, and insight into days of the week, USDA market report dates and other times of the year that could impact prices.
Seasonal price patterns
It’s time to pay attention to pricing opportunities in old-crop and new-crop grain. While seasonal price patterns are the strongest in corn, they also apply to soybeans and wheat. Remember, they are tendencies, not certainties, Usset says.
Grain producers should be alert in spring and early summer.
Perils of holding grain in storage
On-farm grain storage is useful for production, handling and grain marketing. It can also help avoid harvest price lows. However, grain storage can be misused, Usset says.
There is risk in holding grain too long. Those risks involve new-crop futures prices and basis. Because of the risks, Usset shares his 11th commandment of grain marketing: Thou shall not hold unpriced corn or soybeans in storage beyond July 1.
Get your free grain marketing guide today
Using the tools and insights Usset offers throughout the free guide, grain producers should be able to create an effective grain marketing plan for the farm business. Key points to consider when creating that plan:
· Use decision dates
· Set price targets
· Don’t store unpriced grain beyond July 1
· Utilize pricing tools
· Analyze using trend-following tools
Download the free guide now, and get your grain marketing off to a good start!
Read more about:Grain Storage
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