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Worried About a Delayed Spring Planting Season?

Getting fertilizer to the right places on time could be tough.

While it might be a bit early to worry about planting delays, significant snowfall in the northern Midwest and flooding in the South and Delta regions could mean a less-than-ideal start to the spring planting season.

Is this really a concern in late February? In most years, no. However, harvest was prolonged due to excessive rain, and fall fieldwork for many was not completed. An early spring would be ideal, and that does not appear likely at this time.
The biggest concern of a late spring may be the logistics of moving enough fertilizer to the right places at the right time. Some producers experienced a good fall and finished fieldwork on schedule. Still, large swaths of producers in the Midwest struggled, and had little to no fertilizer applied. A logjam of maneuvering supplies is a real potential, especially if rain lingers into late April.

The corn market may become anxious, and that could mean a price rally, perhaps significantly. Also consider the perspective of end users, and how a planting delay could adversely affect their bottom line.
To be clear, we are not forecasting a bull market; only recognizing that the stage is set for a price recovery. After five years of low prices and growing demand, we need only a catalyst to set a rally in motion. Nearly 75% of the world’s corn crop is produced in Northern Hemisphere countries. As spring and summer weather go, so will the price for corn. You can do something now to prepare for prices ahead.
We recommend that buyers cover expected needs through the end of 2019. Consider contracting 50% of cash needs and cover 50% by purchasing call options. If you’re a producer waiting to reown 2018 crop, now is the time to take action. Consider using call options for fixed risk and holding power. September calls may work best, as they provide enough time for weather to impact crop production.
Do what it takes to prepare for this year’s price action. Consider your goals and cash flow needs, and understand the risks and rewards before entering into any strategy.

If you have questions or comments, contact Top Farmer at 800/334-9779, ext 129.
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.

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