FAIRBURY – With plenty of demons in the past year with marketing, planting and a delayed harvest, it has been rough for everyone in agriculture.
Merrill Crowley with Midwest Market Solutions in Watseka told attendees of the recent Jenner Precision winter grower meeting that the hardest time to sell is in the high months. This might be a good time to take a look back and adjust your marketing plan.
“November and February are two months that are the biggest sales months for corn,” Crowley explained.
Crowley has observed many successful farmers sell any unsold bushels unless there is a clear opportunity to pay for storage. Success on the farm often depends on a grower’s personal philosophy.
“You’ve got to learn how to lose,” said Crowley.
We are seeing basis levels break a bit which is not unexpected. Crowley feels crop insurance is a good tool to have once we get the average price this month. He believes basis will erode and carry widen on corn.
“I think the USDA is over-estimating the corn crop.”
With so many problems last year and areas which didn’t perform well, Crowley finds it hard to believe USDA’s estimate is accurate.
Regarding weather, Crowley has heard some say we will be wet during the coming season while others are forecasting dry weather. Weakening solar cycles could be the bigger picture item. This could shrink our Corn Belt and the Wheat Belt in Russia.
“Basically, you are going to leave your warming trend,” Crowley stated.
A strange phenomenon could happen like volcanoes and more fires in the world. The year without a summer occurred back in 1816 when frost occurred in early July. The cooler weather suggests a change in the length of the season and there is plenty of ash out there from the Australia wildfires.
In summary, Crowley suggests having a marketing plan and following that plan. If you want protection, buy 3.80 or 3.75 March puts at 4.5 and 2.5 cents to cover Tuesday’s USDA report. If the report is bullish, you can sell the options as soon as possible.
“It’s not uncommon for a market to break the low and come back,” Crowley noted.