With low corn prices and soybeans nothing to brag about, develop a 2014 marketing plan that prepares you for any good marketing opportunities that develop.
Dennis Shurtz, Arkansas City, Kan., is one grower biting the bullet and getting some 2014 and even ’15 production marketed at prices much lower than a year ago. “I booked some 2014 and 2015 soybeans at $11.60 in late November (based on November ’14 and ’15 futures prices),” he says. “There are going to be a lot of beans planted. So you just have to reach back and sell beans at these lower levels.”
Soybeans will make up about 40% of his 2014 production, with another 40% of his acres in wheat and 20% in corn. “I start making marketing decisions when I set my planting percentages,” Shurtz says. “Most strategies revolve around options and futures, often at the same time. I am using $14 November call options to protect the $11.60 futures in the event of a market rally.
“If December corn trades up to $4.70, I’ll market some near there. A lot of guys are having a tough time selling at these levels because they’re used to selling $7 corn.”
University grain marketing economists agree that “the highest prices for the year may be on the board right now – and they’re near breakeven at best,” says Corrine Alexander, Purdue University Extension grain marketing specialist.
“Farmers need to have a plan to take advantage of little rallies when they occur to bring up the bottom line,” adds Chad Hart, Iowa State University Extension grain marketing economist.