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277717

Marketing Isn't Finished Yet for the Year

 We’re coming to the end of October and for some of you, the end of another harvest with better than expected yields. But you may not be done marketing for the year just yet. 

This year marks the sixth consecutive bumper crop here in the states, leaving us with plenty of supply on hand and keeping prices below $4.  

Harvest progress has not been ideal for everyone. The longer the crop stays in the field, the greater potential for yield loss. Herein lies, perhaps, a pricing opportunity before the end of the year. 

Earlier in the month, some of the northern crop states experienced heavy rain and snow which put them behind pace and has created opportunity for yield losses for both corn and beans. Once the weather started to improve, harvesting resumed and prices slid further. Markets are now oversold.  

Last year prices continued to fall through harvest into winter as the crop size continued to increase. This year, USDA actually lowered yield for corn from its September estimate to October. The thought that corn crop may not be growing in size, but possibly losing yield could provide support to the corn market and allow for a post-harvest rally into the end of the year. 

Having grain left over from last year yet to sell and better than expected yields this year may have some scrambling to find storage. For some of you, paying for storage may seem like your only option, but I encourage you to compare storage cost versus re-ownership using calls or futures. Selling your excess bushels and buying the board or a call option may free up cash and still give you a chance to benefit should prices move higher into the end of the year. 

Another factor in looking for pricing opportunity between now and the end of the year is watching for possible basis improvement. It’s that time of year, when the last thing people really want to do is price grain when they are worried about just getting it picked before the weather turns. This lack of producer selling sometimes encourages elevators to tighten their basis in an attempt to get you to sell them your grain. 

With prices at lower levels like these, one has to be creative and, on their toes, watching for ways to add value to their sales. Good luck and have a safe harvest. 

If you have questions, you can reach Cathy at cekstrand@s-pelmwood.com.

The data contained herein is believed to be drawn from reliable sources but cannot be guaranteed. Neither the information presented, nor any opinions expressed constitute a solicitation of the purchase or sale of any commodity. Those individuals acting on this information are responsible for their own actions. Commodity trading may not be suitable for all recipients of this report.  Futures trading involves risk of loss and should be carefully considered before investing.  Past performance may not be indicative of future results.Any reproduction, republication or other use of the information and thoughts expressed herein, without the express written permission of Stewart-Peterson Inc., is strictly prohibited. Copyright 2018 Stewart-Peterson Inc. All rights reserved.

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