Posted by: usset001 | July 19, 2010

Looking ahead to pricing of 2011 corn

About six weeks ago, I wrapped up marketing the 2009 corn crop. Not long after that, I reached my objective of pricing 75% of my 2010 new crop. With grain prices enjoying a summer rally, it’s time to look ahead to 2011.

My 2011 pre-harvest marketing plan for corn (shown here) will be posted later this week. I tell producers that the single most important piece of my pre-harvest marketing plan in the minimum price objective. My minimum price objective for 2011 is a cash corn price of $3.55 per bushel or, assuming a harvest basis of 40 cents under, Dec’11 corn futures at $3.95 per bushel.

I consider pre-harvest sales made before January 1 to be “early” sales, and I demand a premium price for early sales. I’ll get started with 2011 with a sale of Dec’11 futures at $4.26 per bushel. If I follow my plan in a strict manner, I would make another early sale at $4.45 Dec’11 futures. Don’t be surprised if I make it happen sooner – I don’t consider a position of 20% sold as “too aggressive.”

For those who have not started on 2011 (I’ll bet that very few have), I ask a question: What price are you waiting for to start?


Responses

  1. Ed after reading grain marketing is simple I wondered with prices as high as they are how would I attempt to set price levels or should we just market all ins bu right now

    • The answer depends on your appetite for risk. This is one heck of a strong bull market. I am more comfortable with pricing a good portion of grain now, and saving the last for some decision dates in the spring.

  2. buy corn, let the price on FOB


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