Time to get back to the basics.

Kurt Wittler

by Kurt Wittler

Over the past three months, July soybean futures have rallied more than $3.00 and new crop November futures have climbed $2.50, July corn futures have moved over 75 cents higher and December futures 65 cents over just the past two months. Grain markets made a similar run late last June into early July, and we all remember how fast that rally turned and very quickly gave it all back.

It is particularly important during these volatile stretches that we stick to “The Fundamentals of Marketing.” A framed photo of these fundamentals sits on my desk, and I want to share it with you.

  • Breakeven – Know how much has been invested in the crop
  • Net Revenue vs. $$/Bushel – Focus on making profitable sales instead of trying to guess the high
  • Sell in Percentages – Crop acres will change, percentages stay the same
  • Targets vs. In-season Sales – Seasonal targets are less emotional than at-the-moment sales
  • Be Consistent – Sell the same percentage before harvest every year
  • Diversify – The future is unknown, so spread out your risk by making incremental sales with different types of contracts
  • Think Big Picture – Do not get hung up on one sale whether good or bad, total dollars generated is what pays the bills

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This last one can be one of the most challenging “fundamentals” to stay focused on. My son was a member of the Class A State Runner-up Norfolk High School golf team. Over two days of competition, the team took 616 shots. I can assure you that not all of those were “good.” They are coached that once a shot is executed, there is nothing they can change, whether good or bad and need to prepare for the next. The best golfers are the ones that can quickly put a bad shot behind them and not get overly excited about the good ones. I believe the same holds true in grain marketing.

This past week, the world said goodbye to “The Greatest” Muhammad Ali. As Cassius Clay at the age of just 18, he won the Olympic Gold Medal at the 1960 Rome Games. As a youngster in the early to mid 70’s, I was able to watch some of his greatest fights and his incredible showmanship. Ali was so much more than a “sports hero”. He has so many famous quotes, a few of my favorites are “I don’t like fighters who talk too much.” “If you even dream of beating me, you better wake up and apologize,” and “live every day as if it were your last because someday you’re going to be right.”