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Plan Ahead to Avoid Weather Marketing Woes
By Cathy Ekstrand
This is a year the market is assuming large yield guestimates and colossal acre numbers combined with an ample supply on hand from last year. Based on what the market is saying, it’s time to congratulate you on another record crop. Oh wait, you say you haven't harvested anything yet? Some of you aren't even done planting yet?
The reality is that we are now coming to the time of year that will truly determine crop size. This is the month the market will know more. On June 30, USDA will release its Planted Acreage numbers along with another quarterly grain stocks report. Currently, the trade is anticipating large acre numbers for corn and soybeans as well as increases in supply. The stronger dollar has kept rallies in check and demand stymied.
Pre-report guesses peg corn acres this year at 89.2 million compared with 90.6 million last year. For soybeans, 84.6 million acres compared with last year’s 83.7 million. On the bullish side, there has been some flooding, and some acres may have been abandoned. On the bearish side, we have plenty of domestic as well as world stock on hand, and it will take a significant production threat somewhere in the world to turn the lower pricing trends back up in row crops. Some feel the early start to planting and favorable weather could boost yields and offset losses in acres.
So what does all this mean for you? Be prepared for whatever prices may do. Plan your marketing strategy ahead of this planting report so you can position yourself for wherever the market may go this summer regardless of weather. After all, it is summertime, and wouldn’t you rather be working in the garden, camping, swimming, or enjoying countless other activities besides watching the grain markets?
For example, plan to make remaining sales in increments of 10% between now and the second week of July. Get your offers in place at your elevator. Should prices reach your targets, your sales will be made. During this time of year, we often see some of the last opportunities for weather rallies. Once we get past the middle of July, there tends to be little that affects the market until after harvest, and prices tend to trend lower. Also, during this time, be sure to make forward sales as well as implement hedging strategies for the coming year’s crop.
This is the time of year when you need to take advantage of rallies and whittle down inventory. Once your plan and offers are in place, relax and enjoy your summer.
One last cool, unrelated tip for your family pet. When you freeze juice or Jell-O for the kids and grandkids, don’t forget the pets. Put chicken broth and water in a bowl with a few treats and freeze.
Dogs will love having their own cool treat to eat.