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Make Scale-Up Old And New Crop Sales

Agriculture.com Staff 01/27/2009 @ 1:05pm

January is a good time to review last year's marketing strategies and fine-tune your plans for 2010. Following are three action steps that appear in the January marketing checklist from my 2010 marketing calendar.

Review Your 2009 Sales. Start out by listing the date you sold, the amount that was sold, the basis when you sold, and your year-to-date average.

Write Out Your Marketing Plan. Be sure to include the balance of your 2009 and 2010 crop sales.

Note The Highs, Lows, And Closes. Study the December 2010 corn futures and November 2010 soybean futures for the first 10 trading days of 2010. A close above or below those key levels sets the trend into the end of March.

I use a lot of seasonal studies when I put together marketing plans. The seasonal odds work that I have just completed for the 2010 marketing calendar shows that in the month of January corn prices are 5¢ higher with a reliability of 60%.

For soybeans, the seasonal pattern projects higher prices with an average gain of 16¢ per bushel and a reliability of 60%.

The fact that prices usually rally this month does not mean I will blindly hold on until the end of January. If a weather scare develops in South America and prices hit certain profit levels, I will make incremental sales during the month of January.

Another way of looking at the corn and soybean markets is that we are usually about half way from the harvest lows to the usual spring-summer highs.

For the 2009-2010 crop year, I am looking for an early high as prices put in an early preharvest low in September 2009. Be ready to make cash and 2010 sales of corn and soybean markets in the spring of 2010.

How high can prices go? Review the May 2010 CBOT Corn chart (above) and the May 2010 CBOT Soybean chart (below).

The May 2010 CBOT Corn chart shows a low on September 8, 2009, at $3.25, with a rally up $1.08 per bushel to the next high. An equal leg up would project May corn up to $4.95 to $5.00. I have several different analysis tools that all project prices up to the $4.90-$5.00 price level. At this writing, those objectives seem very high. And if they are hit, I will be glad to make additional sales.

The May 2010 CBOT Soybean chart shows a low on October 6, 2009, at $8.87. The first major wave up was $1.33 per bushel. If you project an equal leg up from the November 9, 2009, low at $9.58, it projects May Soybean futures up to $10.89. It will take some major weather problems in Brazil or Argentina for prices to hit that objective. I use multiple chart analysis tools, and several of these tools project prices up to $10.80 to $11.40 on the May 2010 Soybean chart.

January is a good time to review last year's marketing strategies and fine-tune your plans for 2010. Following are three action steps that appear in the January marketing checklist from my 2010 marketing calendar.

Think revenue per acre not price per bushel. In the volatile grain markets the last few years, I have watched farmers make great financial progress, while others struggle to get their operating loans paid back. The major difference has been yields.

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