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Soy Roy: Looking back

12/27/2013 @ 2:10pm

By way of review of this year’s marketing success, I normally track price for the dead-cat bounce in the soybean market beginning in early September and ending on December 31. Looking back at where 2013 soybean prices spent  during this time period gives us a way to evaluate this year’s marketing strategies. I look for a harvest low and subsequent rally off of that low for an opportunity to make sales of cash soybeans. Since I am semiretired and produce less than a bin full of soybeans, I never plan to store them on my farm. Another factor is that I do not like to handle beans any more than necessary. This puts the pressure on to get the beans sold at the best price available and pay as little commercial storage as possible.

I track both the local cash bid here in Cass County, Nebraska, and the closing price for March futures each day during the four-month time period. This year was unusual in that there were two harvest lows. The first was October 15. A brief rally above that low was followed by a second low on November 5. The cash price on that day was $12.00.   The rally beginning the day after the low resulted in price peaks of $13.34 for March futures on December 17.  In the cash market, the high was $12.92 on November 29.  This was a rare year when cash and futures prices peaked almost three weeks apart.

In going from harvest low to the dead-cat bounce peak, prices hit my price targets of $.25, $.35, and $.50 cents above the harvest low.  My final target was $1 a bushel over the low. That target never got hit. I made the final sale at $12.75, or $.75 over the harvest low. While I did not quite reach my final goal, I nevertheless got the crop sold at prices that were better than the low that was made during harvest. I also stopped the commercial storage costs. In addition I have the income from the 2013 crop to purchase inputs for next year.

My secondary goal for the strategy is to finish sales before my drop-dead date of December 31. Except for a few bushels I reserve for my “gambling stock,” I can quit worrying about marketing the 2013 soybean crop and focus on corn, which is stored on the farm and much more difficult to find a profitable way to sell.    

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