Posted by: usset001 | December 16, 2010

Plan Updates: Pre-Harvest Marketing of 2011 Corn

“Too early and too cheap” This is the all too familiar lament of the proactive grain marketer.

My original 2011 pre-harvest marketing plan for corn was posted in mid-July. A late summer rally had me pricing 10,000 bushel increments of the 2011 crop in mid-July, late August and mid-September. I capped my early sales at 30,000 bushels, or about 30-35% of the anticipated crop. The average price on these bushels is about $4.50 per bushel on the Dec’11 contract. Ouch! Dec’11 futures are currently in the area of $5.40 per bushel.

On November 9, I posted a revised plan that recognized rising fuel and fertilizer prices, and higher production costs. All of my price objectives were increased. Starting January 1, I am willing to price more 2011 new crop. My next two relevant price objectives are at $5.15 and $5.40 Dec’11 futures – it looks like I will have something to do.

In the world of grain marketing, too early and too cheap is not a terrible problem to have. You may choose to note that 1/3 of my crop has been priced at nearly $1 per bushel under the current market. I choose to note that I have two-thirds of a crop to price, and we have not even begun to think about the 2012 crop. Since early summer, the value of the 2012 crop is up over $1 per bushel.

Corn bulls are easy to find. I hope they are right. I may have been too early and too cheap on some bushels, but I have a lot of bushels left.

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