Posted by: usset001 | December 17, 2010

Plan Updates: Pre-Harvest Marketing of 2011 Soybeans

Too early and too cheap applies to soybeans too.

My original 2011 pre-harvest marketing plan for soybeans was posted in early August. I priced about a third of my expected 2011 crop in two different sales, averaging $10.35 per bushel in the Nov’11 contract. That market has since topped $12 – too early and too cheap.

As I did in corn, on November 9, I posted a revised plan that recognized rising production costs. Price objectives were increased. Starting January 1, I am willing to price more 2011 new crop. My remaining price objectives are at $11.60, $12.00 and $12.40 Nov’11 futures – pre-harvest pricing of soybeans may be done early this year.

I have put no thought into pricing soybeans more than one year out, so 2012 and 2013 remain wide open. Bring on the great bull market!


Responses

  1. What are your thoughts on multi year contracting? I have had several producers, just within the past couple of days, want to price 2012, and 2013.
    Thanks

    • Multi-year marketing? I think the only producers who can afford to think in terms of multi-year marketing are those that own their own land, or those who have long term and fixed price rental agreements. Even these producers are making some big assumptions concerning their fuel and fertilizer costs.

      Ten years ago, it seemed like a big challenge to get producers to consider pricing grain – even a portion of their expected crop – before harvest. Now I want to throw a little cold water on the rare ones who want to go out 2 or 3 years. We live in an uncertain world! Are we that sure of the economics of crop production 2 or 3 years out?

      I’ll never say never, but if someone wants to go that far out, keep it limited to 1/3 of an expected crop or less.


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