A couple of weeks ago, on February 9th, the USDA updated supply and demand numbers. An increase in corn used for ethanol of 25 mbu was more than offset by a reduction of 50 mbu for exports and a 10 mbu increase in corn imports. Net change resulted in 35 million bushels being added to domestic carryout now sitting at 1,837 mbu. For soybeans, the crush number was reduced 10 mbu which increased domestic carryout to 450 mbu. Some would argue that leaving exports unchanged leaves future reports vulnerable to even higher carryout numbers.
What do these numbers mean to you? These numbers tell me, that based on what we know today, being sharp in your marketing plan will be critical and deserves more than just a little of your valuable time. There are many different ways to market your grain. There are contracts available that allow you to keep grain moving, take advantage of strong basis, generate cash and stay open to the market. There are contracts available that allow you to add a premium to a sale in exchange for additional bushels at a price you determine. These are just a few of the many non-traditional contracts available through CVA.
It “feels” like there is a lot of unsold grain currently sitting in producers bins. Any move toward the high end of fairly narrow trading ranges, at this time, are greeted with decent farmer selling, particularly in the western Corn Belt where production last year was excellent. It also “feels” like very little 2016 crop has been sold.
So “What do I do”? First of all, it’s ok to ask for help. Next, we talk about it all the time, start by knowing what it cost you to raise a bushel of corn or a bushel of soybeans. Use conservative but realistic yield estimates in these break-even analysis. Make yourself familiar with how all contracts work, and most importantly, be ready to execute when the market provides the opportunity to make profitable sales.
As ProEdge Grain Specialists, we are here to help you. We can educate you on different types of contracts that can all be implemented into your grain marketing plan, whether the grain comes to a CVA facility, or is direct shipped to one of the many end-users in our trade area. There is a ProEdge Grain Specialist assigned to each of our grain locations. To find the Specialist closest to you, click on ‘ProEdge Grain Marketing’ under the ‘Grain’ section of our website: cvacoop.com