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This is your second chance

Don’t become indifferent toward marketing; sell grain at the high end of the range.

March through early May was a painful time for grain producers. A wet and cold spring just didn’t seem to matter. The corn market – old-crop and new-crop futures – sunk to life-of-contract lows, as did soybeans and wheat. Producers were probably thankful for the planting headaches, because it took their minds off an ugly market.

Mid-May arrives and I guess a cold and wet spring does matter. In a matter of days, Dec’19 corn futures were back above $4 per bushel. Thanks to a strong basis, spot corn prices in southwestern Minnesota are above $3.50/bu. for the first time since May 2018.

This is your second chance.

I understand that $3.50 corn is not a great price for corn. And while $3.50/bu. is the highest price seen in a year, it is simply the high end of a narrow range. Since harvest in southwestern Minnesota, the cash price of corn has been stuck in a 30-cent range, $3.20-3.50/bu. This may be dull stuff, but let me offer a gentle reminder that it is better to sell at the high end (vs. the low end) of a range.

I sensed something during my travels this winter. Low prices, combined with a lack of volatility, lulled producers into an indifference towards marketing. The logic shared by many was that ending the trade war would provide the spark needed to send prices higher and bust out of a narrow trading range. The trade war lingers on (maybe they aren’t that easy to win) but a planting season that is too wet and too late has provided a spark.

This is your second chance.

My favorite baseball team – the Minnesota Twins – are in first place so a baseball analogy seems right. A few years back, the Twins had a young ballplayer mired in a hitting slump. It is painful to watch a ballplayer in a hitting slump. A veteran teammate had finally seen enough when he got in his face and said, “You gotta have a $#@%^&g plan out there!

Allow me translate his sentiment. Hitting a baseball is very difficult. It gets even more difficult if, like a young player mired in a slump, you don’t know which pitch you are looking for. In other words, every hitter needs a plan at the plate. It might be as simple as looking for a fastball on the inside part of the plate, or not swinging at the slider on the outside corner. Having a plan does not guarantee success. After all, the pitcher is trying not to give you your pitch. But your odds for success are better with an intentional plan.

Marketing grain, like hitting a baseball, is difficult. It gets a little easier if you have a plan. Cash corn prices are 30 cents higher in a week. New-crop futures above $4 is an opportunity to get close to $4 cash corn on the 2019 crop (see “How to get $4 corn”, CSD November 2017). What price are you waiting for? As the ballplayer said, you gotta have a plan out there.

This is your second chance.

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