When it comes to marketing, there are so many things to look at, from the Chicago Board of trade to local markets. The most difficult decision is often deciding when to pull the trigger and make a sale.
Risk Management Consultants are consistently looking at fundamental and technical strategies for clients. All to gain knowledge about the market, its current state, and where it may go from here. That said, I wanted to share some historical data which may help producers know and understand the history of the grain market. History shows patience can provide opportunity, a mere hiccup in production, fund money, or geo political event causing market movement.
Corn: In looking at December corn futures, the chart below shows historical trends. The three-year, five year and ten-year average illustrate that the lows come in September, and later showing a harvest time bounce. We also note the chart illustrates the contract highs coming in during June and/or July. If a producer markets a percentage of their corn anytime between April 1st – July 20th, 14 out of 18 years the price of December corn is lower at Harvest.
Beans: November bean futures lows historically come in at harvest time. It seems many producers prefer to take beans from the field to the elevator. This would explain the selling pressure we see at harvest time pushing beans to their lows. If a producer sells beans anytime between April 1st – July 20th, 11 out of 17 years the harvest price is lower.
Take home: Selling ahead historically provides an advantage over harvest pricing. Patience may be key to selling. For new crop corn or beans, CVA’s extended price contract can provide some extra time this harvest and free up some money to make payments.
If you are looking for assistance with grain marketing, please do not hesitate to contact another Risk Management Consultant or me for more information on our Client services. Or click here http://www.cvacoop.com/grain/proedge/proedge-marketing-consultants/