It's sometimes hard for Oklahomans and Texans to admit they think alike.

But when those thoughts translate to marketing strategies that produce an extra 75 cents-$1/bu for corn, Ron Limon and Steve Brorman don't mind being in each other's company.

Brorman, from Dalhart, TX, used pre-1999 marketing moves to generate $2.50-plus for '99 corn. Limon, from Coweta, OK, stretched his marketing out even farther by using a similar strategy to book $2.70 corn for the 2000 crop. He also had positions in place to capitalize on any market rallies for corn and beans this year.

Brorman took a defensive move and last December sold December '99 corn futures at $2.45. He made similar moves in March.

He used call options to cover against a market upswing. And bought $2.50 December '99 calls for 13 cents/bu. To offset that cost, he then sold twice as many $3 calls at 5 cents, meaning he lowered his cost of protection to about 3 cents.

With forecasts that the market will likely be closer to $1.50 than $2.50 at harvest, his futures will generate anything over the closing price up to $2.45. He'll lose his 3 cents invested in call option protection.

"If the market is, say, $1.70, I will collect 75 cents/bu off the hedge, less the 3 cent difference in the options trades," he says. "That would put us at $2.42/bu. And we can still take the LDP."

He anticipates about a 50 cent LDP, putting his net at $2.90 or more. If his early hedges had backfired and prices shot toward $3, his call options would have also netted $2.90-plus.

"We would lose about 55 cents from the $2.45 futures, but add 40-50 cents by moving the calls," he says.

Limon has also looked past this year's crop to the 2000 harvest.

"We used $2.70 December 2000 corn hedge-to-arrive (HTA) contracts," he says. Limon adds that he works closely with a marketing consultant firm, Hurley & Associates, of Charleston, MO, to establish marketing strategies. "We took those positions the first of October '98. It's a direct HTA for bushels delivered in that time period."

In December of last year, Limon used $2.60 December '99 corn calls and $6 November '99 soybean calls to create a potential for higher prices this year.

But since prices remained below those levels, the grain will likely be sold at harvest and the LDP collected. He will then consider buying calls again to take advantage of seasonal rallies early next year.

"We would have considered forward contracting, but wet weather caused major delays in getting crops established," says Limon.

Richard Brock of Brock & Associates, Milwaukee, WI, says growers like Brorman and Limon are in a minority. That was apparent with last year's crop.

"The top 10% marketed their soybeans or corn early and delayed their LDPs (loan deficiency payments)," says Brock. "It was one of their best years financially.

"Unfortunately, a large share of farmers did the opposite," says the farm market advisor. "They LDP'd early, then sat on their soybeans and corn. Even if they had good yields, it turned out to be one of their worst years for marketing."

Most of Brock's clients marketed this year's soybeans and corn in November-December 1998.

"We hedged on beans at $6.05-6.10 and made a profit of $1.04 on the entire crop," he says. "We also earned 16 cents profit on corn hedged last December."

He advises growers who don't have beans or corn priced to "collect the LDP at harvest if prices are still low, then sit on the crop" if they have substantial storage.

Growers who do not have on-farm storage should consider selling at harvest, taking the LDP, then buying calls to take advantage of a rally, says Monte Winders of Financial Freedom & Futures, Amarillo, TX.

"Technically, we're going to have a rally one of these days," says Winders, who's Brorman's commodity broker. "With call options, growers can take additional money out of the market when the rally comes."

Bob Wisner, Iowa State University grain marketing economist, says growers with on-farm storage should consider forward contracting grain for April-May delivery.

"We could see opportunities to pick up gross return over storage of 40 cents/bu," he says. "If growers take that route, they should strongly consider cashing out the LDP, because if price comes up, the LDP shrinks."

Also, he says look for basis improvements from harvest to later in the spring.

Wisner says get rid of old-crop beans or corn.

"A case can be made for moving and selling old-crop grain now, since historical price patterns show a high risk of declining prices in September," he says. "For those who feel a weather rally is likely, call options can be purchased to retain ownership after sale ... and participate in major rallies, if they should occur."

For new crop, he suggests getting the best cash bid, taking the LDP, then looking at calls. However, watch for high call premiums.

"A $4.50 March call could cost about 21 cents/bu (the mid-July price), for 12 cents out-of-money protection," explains Wisner. "I wouldn't be enthused about that. Growers need to watch call premiums to see if they come down."

Growers are reminded of the $75,000 per year payment limitation. A way to avoid the limit on old crop, says Wisner, is to forfeit some of the grain to the Commodity Credit Corp. For new crop, he says, that may be more difficult if storage space is lacking.