Posted by: usset001 | September 10, 2008

Spring Wheat: 2008 Post-Harvest Marketing Plan

I try to write my post-harvest marketing for spring wheat on the last business day of August, and base my decisions on market prices that day. Check out my 2008 post-harvest marketing plan for spring wheat here.

My pre-harvest sales in 2008 were too early and too cheap, but it’s time to take a fresh look at post-harvest opportunities. My good friend Wally Whipsaw would note that wheat prices soared after harvest in 2007 – holding unpriced grain in the bin is his way of doing what he should have done last year. I don’t like Wally’s approach. Despite reaching prices over $20 per bushel earlier this year, current cash wheat prices of $8 plus are high based on a record world wheat crop production in 2008. Placing grain in storage at harvest and selling (or rolling to) the March contract allows me to, (1) hold onto the current price level, (2) capture a modest carry (33½ cent carry from Sep’08 @ $8.61 to the Mar’09 @ $8.84½) and, (3) wait for a harvest basis of 57 cents under the Sep’08 (90 cents under the March) to strengthen. I think a spring wheat basis of 30 cents under the March, and as high as option price, is possible by year-end or early in 2009.

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