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Corn Producers Have a Lot to Think About for 2019 Marketing

Prepare for pricing opportunity and follow through.

Most corn producers will be harvesting sooner than usual, as this year’s crop is running one to two weeks ahead of schedule. Expectations are for record yield.

In theory, this could pressure prices over the next couple of months. Yet, 2019 looms on the horizon, which suggests preplanning for the year ahead.

Was there anything learned, so far in 2018, that can help guide marketing decisions in 2019? One might suggest the rapid drop in prices in 2018 reinforced just how quickly prices can fall apart.

One week you feel you should not have sold anything, and the next week you feel you should have sold everything. Too much opportunity lost too soon.

Preparation for the year ahead starts now, as harvest approaches. Typically, the fall months (when a harvest low is established) is an opportune time to buy call options for the next year’s crop.

Why buy call options? When too little corn was sold at good prices, you’re left trying to figure out what to do with a lot of inventory.

To better balance these emotions, purchase call options to cover cash sales you intend to make. (A call option gives you the right to own futures but not the obligation.) With call options in place and setting specific target points above the market, you are prepared to sell rallies.

Yet many don’t do this. Why? Fear is often the emotion that holds producers back from doing the right thing when it comes to marketing. In this case, selling rallies. Fear of selling too soon is problematic. Selling too soon at the start of a price rally is an isolation problem (emotionally based).

The key to good marketing is not only preparing for opportunity, it’s also the discipline and willingness to follow through with it.

Successful marketing doesn’t come easy, and there are no guarantees. Those who work hard at it by implementing, preparing, and then managing their positions increase their odds of success. 

Over time, they will likely have a consistently higher price and comfort zone with less emotion, allowing them to make good business decisions for the farm.

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If you have questions or comments, contact Top Farmer at 1-800-TOP-FARM, ext. 129, or ask for Bryan Doherty.

Futures trading is not for everyone. The risk of loss in trading is substantial. Therefore, carefully consider whether such trading is suitable for you in light of your financial condition. Past performance is not necessarily indicative of future results.

Carol Tillmann 
Front Desk Administrative Assistant | Stewart-Peterson
Office: 800.334.9779 | Fax: 262.334.6225
ctillmann@stewart-peterson.com

www.stewart-peterson.com

Futures and options trading involve significant risk of loss and may not be suitable for everyone. Therefore, carefully consider whether such trading is suitable for you in light of your financial condition. Hypothetical performance results have many inherent limitations. No representation is being made that any account will or is likely to achieve profits or losses similar to those shown. No representation is being made that scenario planning, strategy or discipline will guarantee success or profits. The data contained herein is believed to be drawn from reliable sources but cannot be guaranteed. Reproduction of this information without prior written permission is prohibited. This material has been prepared by a sales or trading employee or agent of Stewart-Peterson and is, or is in the nature of, a solicitation. Any decisions you may make to buy, sell or hold a futures or options position on such research are entirely your own and not in any way deemed to be endorsed by or attributed to Stewart-Peterson. Stewart-Peterson refers to Stewart-Peterson Group Inc. and Stewart-Peterson Inc. Stewart-Peterson Group Inc. is registered with the Commodity Futures Trading Commission (CFTC) as an introducing broker and is a member of National Futures Association. Stewart-Peterson Inc. is a publishing company. A customer may have relationships with both companies. Accordingly this email is sent on behalf of the company or companies providing the services discussed in the email.

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