Market/Strategy

[charliep]

Any thoughts on markets/strategy.

Crude oil - $80/barrel based on weak demand I
guess.

DJIA staying above 12,500. Europe uncertain at best.

Canola with a $40/tonne inverse July versus
November. Basis levels in old crop remaining at plus
values/premiums to the futures.

Anything a farm manager should be doing in their
marketing plan?

Soybean meal the driver of soybean prices with
soybean oil the dead weight.

Major seeded acreage estimates this next week for
both Canada and the US.

[crusher]

Lots of volatility. Pick your target price and put in a grain pricing order. I usually look at the charts for a resistance point. Prices could go higher, or could get lower, pick a number that is profitable.

I've got a record amount of canola presold on our farm, at the highest levels ever. Have used futures on some of it just in case the big white combine beats me to it.

[wd9]

Strategy? Watch the grain markets go up
and don't listen to Errol.

[ColevilleH2S]

My marketing plan;

#1 -Read this forum
#2 -Sell some at harvest
#3 -Sell some early winter
#4 -Sell some late winter.
#5 -The day road bans are posted get a phone call from buyers saying they will take delivery now.
#6 -Sell some in early summer.
#7 -Set aside 20% to sell anytime, for that homerun sale.

[ColevilleH2S]

I forgot #8

-Convince myself panic selling "homerun" portion at the bottom of the market is OK.

[crusher]

coleville,

tough to ignore #8, lets you sleep the day you pull the trigger, keeps you awake when its 5% higher a week later.

[charliep]

Just curious if either of you are using any options strategies. Buy puts on rallies. Sell new crop cash on rallies/buy calls on dips.

[crusher]

No option strategy yet. Got an ugly margin call building up. I might do a put on some more tonnes if it goes much higher.

[ColevilleH2S]

No options here either. I figure I already pay the insurance man too much as it is. At the moment I feel comfortable with my cash sales throughout the year strategy.

I'm not opposed to buying puts, I might do it someday, but right now I don't see the need.

[furrowtickler]

Sell 80% crop when in bin. I know several that priced , pre sold - whatever, lots. Crop is drowned out,hailed out, could get frosted and they could be fuked. Just sayin, nice to be way ahead of curve until mother nature throws a curve ball. Make farmers go from nervous to panic and do stupid things things like try to save a crop that is screwed already and *** up sprayers,combines, tractors,airdrills and the crop to boot in desperation because of contracts to fill. JMO...
There is a time and place for every thing, over the years we learned do a little but then wait till it's yours - in the bin. There will be opertunity later as well.

[furrowtickler]

In fact, that is what is exactly happening now.

[SASKFARMER3]

I agree furrow. A great great farmer
once told me how he only grew Flax on
his last year farming. Presold 90% then
it froze in first week of August. Had a
nice Auction sale though.
Its a simple process. Sell some for Cash
off combine. Like our peas at just over
8. We have a shit show on peas but with
whats still in bin and what should make
it will easily cover the contract.
I have half mill in presold. Thats
enough to get to January. Once its in
the Bin its a lot easier. But this idea
that you have to give a crop every
single thing to try to get it to make it
till fall. Mother nature throws a curve
ball all the time. But if your in panic
mode all stops are out for some.

[furrowtickler]

Funny - no other reply . Charlie ??? Other marketing wiz's.???

[sumdumguy]

Just dont get into a corner. Live simply and
without debt. Thats just my opinion. If I followed
mine own advice,I,d be well off. I like to sleep at
night.

[charliep]

I don't think anyone is suggesting selling 100 % of
your expected new crop. What is being suggested is
there is a good probability that prices over the
2012/13 crop year will be lower than current new
crop offers. Everyone can take this information and
make their own decisions.

Being 20 % priced new crop and carrying 80 %
unpriced is a good strategy for an individual
manager. My only caveat is farmers with big cash
flow needs this fall should have a significant portion
of these financial needs covered via forward pricing
and make sure they are carrying risk protection on
both production and price insurance (options). But
again, a very individual decision based on the farm
businesses financial needs and the managers
personal risk preference. No one size fits all
recommendation from me.