From Michigan to middle-Texas and near Mobile, AL, 2008 MarketMaxx winners battled the wrong side of weather markets in their real-life corn and soybean sales.

These growers faced drought conditions that stunted overall yields and sometimes prevented them from making sweeping sales when corn and bean markets blasted off last summer. But that hasn't stopped them from taking early marketing positions where applicable for their 2009 crops.

MarketMaxx — the Corn & Soybean Digest game that saw more than 8,200 players experience the workings of corn and soybean futures and options without facing real-time margin calls or other financial burdens — taught all the winners how market moves could impact their strategies.

However, for Marlette, MI, grower Howard Wilson, 23, it was fear of yields being cut short that prevented him from using the sophisticated marketing tools or even cash markets to make many real-life sales.

“I try to get around 50% of my expected yield marketed early,” says Wilson, who placed second in the MarketMaxx corn contest with an average price of $8.64/bu. for trading 100,000 simulated bu. “But we had a lot of dry weather last year and were afraid we wouldn't make a crop. So we didn't make most of our sales until December.”

His corn sales wound up averaging about $4, and his soybeans averaged about $8.20. They were on top of a corn basis of 80¢ under and a bean basis of $1.10 under.

“When you're not sure about the type of crop you'll make, it's hard to make up your mind on marketing,” says Wilson. “But I am putting together a strategy for 2009 anyway.”

In his plans are to scale-up sales in 25¢ increments when corn reaches about $4 on the cash market. He will also look to scale-up soybean sales when beans reach about $10 cash.

Third-place winner in the MarketMaxx corn marketing contest was Donnie Salac, 46, who farms out of Robertsdale, AL, with his brother Greg, 39, and father Thomas, 70. Donnie's $8.60 average corn price was a little better than Greg's, whose $8.34 price was fourth in the corn contest.

The informal family feud even saw Thomas place third in the soybean contest with an average sale price of $15.39/bu. Soybeans were the key cash crop in the father-sons team's real-life farming operation. Beans were doubled-cropped with wheat. And if not for more dry weather, which pushed their soybean yield projections back to about 20 bu./acre, they might have made more cash sales.

“We wound up with an overall average price of about $10.50,” says Donnie. “That came from scale-up sales that started in spring 2008. We just kept making sales and reached a high of $15 before the market started going down.”

The Salacs' basis was 80¢ under for most of the sales, but closed as harvest approached. “We had the majority of our beans sold at the higher basis level when cash markets were still strong,” says Donnie.

ALL OF THEIR sales were through cash contracts, except for an early put option. “Last spring we bought $10 November puts as protection against a drop in prices,” says Greg. “We paid a 25¢/bu. premium (making the floor price $9.75). When soybean prices started climbing (well into the teens), we got out of the puts.”

Donnie adds, in hindsight, “We should have hung onto them because it would have been price protection when the market started going down in the fall.”

The Salacs were starting to map out a 2009 marketing strategy in late January and were looking at put options once more. “If we can, we will buy puts again in the $10 range to hedge against a downside market,” says Donnie.

Early 2009 marketing was also on the minds of Amber and Steven Beakley, who farm at Ennis, TX. Amber, 29, was second-place winner in the MarketMaxx soybean contest, with an average selling price of $16.69/bu.

“We started our actual 2009 corn marketing summer 2008,” says Steven, who like Amber was a regular MarketMaxx player. “We got about 50,000 bu. sold at an average of $4.80. We tried to get more sold at $7 and above, but couldn't get any bids from elevators.”

For 2008 corn, sales were made between $4 and $6. They achieved an average price of $4.90. “We wanted to make more sales but couldn't because we hit a drought and our production stopped,” (meaning they couldn't chance making further cash sales) says Steven, who also farms with his father, Bob.

“We wanted to get a lot of soybeans sold, as well. But the dry weather cut a lot of our production back to only 8 bu./acre. We had some contracted at $9.50, but couldn't take advantage of that price or the even higher markets that came later in the summer.”

They hope to establish a scale-up sales strategy for beans this year. “But it's been so dry, we hate to get too far out,” he says.

The Beakleys have tried a few futures and options contracts in the past, but rely on sufficient on-farm storage as their main marketing tool. “All I ever did was write them a check,” says Steve, meaning that options never paid off in the family's circumstances.

“But I think we would use more options and futures if we didn't have a lot of on-farm storage. We can store grain and make sales when the markets rally. The storage is our hedging tool.”

The best advice he can give growers on marketing is to have as much on-farm storage as possible. “It gives you much more freedom in marketing your grain,” he stresses.

Wilson also promotes on-farm storage as a good tool for growers. “If you have the capital, try to build more bins,” he says. “You won't have to sweat it out as much at harvest.”

Donnie Salac encourages growers to learn more about how options function. “That's probably the biggest thing I can say to growers,” he says. “Learn all you can about options so you can hedge against a down market or against the upside if markets go up. Used right, you can have protection up or down.”