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Selling the calendar

Agriculture.com Staff 02/20/2006 @ 7:41am

Although much of the Midwest has been blanketed by a winter storm system this week, spring is not that far off. As farmers get busier, it can become more challenging to keep track of markets.

It is not atypical to see the grain markets peak when farmers are most busy in the field. Farmers need to vigilantly monitor grain markets between now through spring, when a price top will likely occur unless summer weather dictates otherwise.

The corn, bean and wheat markets have moved to and are holding at higher prices into mid February, more so than most would have anticipated a few months ago. Demand and a variety of reasons have helped drive prices higher. As producers become distracted with other duties, however, prices can slip and, before you know it, opportunities are gone.

You need to make marketing decisions without good outlook information. Without knowing what the next few months or, for that matter, what summer will bring, you need to recognize when value exists. Currently, all three markets exhibit price levels where a producer should be selling 05 crop, as well as making sales for 06, regardless of outlook. If prices rally further, be prepared to sell more. Have target points outlined, so when the market hits these, you are either forward selling, hedging or buying PUTS.

Markets are notorious for a continued price grind upward, but when a top is in, they can lose all they have gained in a short time period. Do not get caught unprotected if prices make a fast and furious slide downward. Keep a vigilant eye on the markets. Sell the calendar by rewarding price rallies during the winter months. A good spring for planting could send prices downward.

If you have questions or comments, please contact us at 1-800-TOP-FARM, ext. 129.

Although much of the Midwest has been blanketed by a winter storm system this week, spring is not that far off. As farmers get busier, it can become more challenging to keep track of markets.

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