Posted by: usset001 | February 11, 2011

2011 Pre-harvest marketing update – corn

It’s been a while since my last update on pre-harvest marketing activities for 2011. If you’ve been sleeping for the past few months, you may have missed the fact that we are in a raging bull market. Bull markets, in turn, typically result in that “too early and too cheap” feeling for proactive marketers like myself.

I started pricing the 2011 crop last July, and by mid-September I had about 30% of my expected crop priced (the expectations are based on “actual production history,” which can be a subdued view of current production capabilities). I held off on any more sales until the start of the new year. Prices by early January had exceeded all of my price objectives, but I can sense when a freight train is running down the tracks full tilt. I chose to price another 15,000 bushels in early January and to defer my last two sales to decision dates in April and May.

The bottom line is this: In corn, I stand at about 50-60% sold on the 2011 crop at prices that are about $1.50 per bushel less than the current market. These will be profitable sales but, ouch – too early and too cheap. My glass half-full attitude reminds me that I still have nearly 50 of the crop to price and I have not begun to look at 2012.

With Dec’12 futures trading at about $5.50, 2012 is on my radar.

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