Grain Exchange 3-5-20
The same old tune keeps playing in the grain markets. Demand is sluggish and coronavirus worries keeps weighing down the grain markets. Export sales this morning are neutral corn and wheat and negative soybeans.
Corn continues to trade in a narrow range. Ethanol could add some strength to the market with the Trump administration directing the EPA to scale back exemptions for refineries.
Soybeans continue to struggle with the lack of demand. South America is seeing good yields. The recent tax increase in Argentina could slow future soybean production.
Wheat continues to trade lower. A couple things that may lend support to wheat is lack of snow cover in Russia and US winter wheat exiting dormancy early would expose wheat to cold snap damage.
Let’s change gears and focus on a marketing plan. A grain marketing plan is a proactive strategy to price grain, considering cash flow needs, profitability, anticipated production and your adaptability to risk management. The goal of a marketing plan is to be proactive and not reactive.
The first step of a plan is to know your cost of production. Your marketing plan should cover your critical costs, increase income and reduce risk. Once cost is established you can set pricing goals and target dates. Setting sales deadlines that correspond to seasonally higher prices will help meet your target price. Set your target price and stick to it.
Utilize open offers to meet your pricing goals. The reason for a marketing plan is to help take some of the emotion out of the equation. Utilize different marketing tools available to you. Landmark offers a variety of contracts to help diversify your plan. Our contracts are available delivered to your nearest Landmark elevator, direct ship market or picked up on the farm.
Hitting the high price is an unrealistic goal but selling in steps as the market goes higher is achievable. Make a plan and stick to it, you will minimize the emotions.
Reminder that the deadline to sign up for our average grain price contract is March 13th. The averaging period is daily from March 16th to July 10th.
Landmark has a great team of grain marketing specialists who can help you develop a grain marketing plan. Think spring and stay safe.