Expect to see higher corn and soybean prices this spring and summer with a good chance of lower prices again by fall. For most producers who need to sell off the combine, it's not a question of if they need to sell ahead. It's a question of how to sell ahead.

If you look at your new-crop cash bids and don't like the basis being offered, you probably will want to use some new-crop hedges. How you place each order to sell a futures contract will make a huge difference in your selling price, and will determine whether you achieve a profitable hedge. Getting your order in place and understanding how your order moves through the

Chicago Board of Trade (CBOT) is important.

There are six steps in processing an order:

* You call your broker and give the order.

* Your broker calls the floor at the CBOT and gives the order to a phone clerk.

* The phone clerk gives the order to a runner, who runs the offer to a broker in the pit.

* The pit broker executes the order by open outcry where orders from other hedgers and speculators are matched.

* The runner brings the filled order back to the order desk where the clerk reports it to your broker.

* Your broker calls you back, confirming the trade.

During the entire process, the orders are time-stamped to ensure that the trade is made in a reasonable period of time, usually less than two minutes, and that the quantity, contract month and price are all correct.

Before you call your broker, make sure your homework is complete.

First, make sure you have a written plan that outlines your marketing objectives. Everyone in your farm business who needs to be in agreement with the plan, such as partners, should be.

Second, decide ahead of time if you are a conservative or aggressive hedger. Are you hedging with the idea of selectively trading the market to try to make money in the futures market? Or are you a true hedger who will lift out of the hedge when the cash product is sold?

Third, make sure your lender is on your team and willing to put up the margin calls if futures move higher. Odds are good that your lender will want a Security Agreement and Assignment of the Hedging Account. Once your homework is done and your written plan is in place, get ready to place your order.

Here's a list of orders and what each one actually does.

Price Orders

Market order. This is the most common order in commodity trading. A market order authorizes your broker to buy or sell at the existing price. Your order will be filled at that moment at the current market price (unless futures are locked limit up or limit down).

Price limit order. This means that the order will only be filled if futures trade at that price or higher. As an example, you can have a resting price offer to sell November 2000 soybean futures at $5.99. That order will only be filled if November futures trade at $5.99 or higher.

Stop limit order. This is an order to sell only when a specific price below the market is hit. At that time, the order turns into a market order and you will receive the market price. This order is often used to protect profits or limit losses. It should never be used in thin or illiquid markets.

Time Orders

Fill or kill order. This is an order to buy or sell at a specific price. The order must be filled instantly or the order is killed. This can be useful when you need to sell and know immediately if your offer has been accepted.

Market on the close order. If you had an offer to sell above the market that wasn't filled by 1 p.m. CST, and you want to start the hedge, you can make this type of order. It will enable you to sell at the closing price of the day.

Time order. If you have a written plan that calls for sales at a certain price level or by a certain date, then selling at 1 p.m. on the day of your choice may be a way to get the sale done. The broker will call the order desk and make the sale during the time period you have suggested. It's simple and it gets the job done.

I prefer to use a combination of orders, and I change the orders as market and crop conditions change. I usually have offers in above the market to make OCO (one cancels the other) sales or to get the sale made by a specific date. As an example, I may have an offer in to get another 10% of new-crop corn sold if December 2000 futures rally to $2.70 or higher, by April 21, 2000. Selling OCO will get the sale made either by price or time.

Producers who study marketing and carefully write and execute hedging plans consistently make more bottom-line profits than those who hope prices will be high when they need to sell.