Know your cost of production, formalize a marketing plan and take action.

Those are the simple steps followed by many farmers who are successful market-risk managers.

The most savvy also factor in insights from experts, like marketers Stan Stevens, Bob Wisner, Jerry Gulke, Jim Gill and Ron McDaniel. Here's a wrap-up from those professional marketers on what to do this year.

1) Be cautious with sales at low prices. If you should have sold early the last two years, that doesn't make it right this year. 2) Use seasonal and weather rallies to make sales. 3) Realize that soybean acres will increase unless there's a farm policy change. 4) Understand that weather can be a major factor. 5) Develop a plan that allows for flexibility.

Here are specific recommendations from each of the five experts. Although their advice is for soybeans, many of the principles apply to corn as well.

Stan Stevens, a University of Minnesota ag economist.

Any market plan needs diversification. Spread things out, don't just drop everything into one box. Try pricing one-third of your beans prior to the growing season, then one-third later if the opportunity arises. If prices are too low, hold till next year's spring rally.

Research shows an abundant soybean supply through the first part of winter. Then in February, March, April and May the composite usage rate is more intense than farmer sales. That's the reason we often have a good spring rally.

One of the biggest mistakes you can make is holding too much of the old crop into late summer, hoping for that big move. Instead, consider selling cash soybeans on rallies and then own a call on part of the sales for a late-summer rally.

Another marketing approach is to buy puts ahead of the growing season, but then you can give up pretty big premiums. And if you are going to enter forward contracts in the spring for fall delivery, expect to take a small hit on the basis. However, that could be a reasonable tradeoff if you don't want to pay all the premiums on the put options.

I'm also optimistic on a spring rally because the price has gotten too low and because of potential weather problems in South America.

The big carryout numbers in beans always seem to magically dissolve. Southern Hemisphere weather can kick prices up, eventually affecting the Northern Hemisphere, too.

We don't have that much excess supply that a short crop in the U.S. would not get pretty bullish.

Bob Wisner, an ag economist, Iowa State University.

The Iowa State analysis on model farms has revealed that, on average since 1985, synthetic puts with a one strike price out-of-the-money call option purchase, implemented during planting season, had a much better value than harvesttime cash sales.

The research was based on selling November futures on the third Thursday of May, then re-owning by buying a one strike out-of-the-money call option. The call was held into early July, and also into early August, to wait for possible weather scares and summer rallies. Both call exit times exceeded harvest cash marketings since hedge sales protected against falling prices until mid-October, when the hedge was lifted.

When the previous U.S. crop was below total utilization, we shifted that strategy to mid-February, because then the market is usually bid up. That tells farmers there's a need for more acres. What this strategy says is that we're willing to absorb the first 25 cents to reduce the cost of the call.

Here's a strategy to consider for part of your bean crop: If the crop is developing well into summer and you know a good U.S. crop is likely, liquidate your November bean call. If a weather scare is developing, hold calls longer to participate in any gain that may occur.

With the short futures and purchased call, if weather reduces your yield substantially, you can liquidate part of your position.

Expect November futures to range from $5.05 to $7.25 - where $7.25 would be a drought or extreme flood condition problem - and $5.05 the record yield. Historically, the extreme low yields have occurred about 25% of the time in recent years.

Expect at least a half-million-acre increase in beans this year. If you're strictly a cash marketer, be cautious on new-crop sales and consider revenue insurance with a fall price protection feature to protect that commitment.

Overseas, China will be a sizable bean and meal buyer this year. We may also give more to Russia, but it won't be even close to the market influence it was in past years, when it was a cash buyer.

Jerry Gulke, Strategic Marketing Services, Rockford, IL.

Decide what price you want for new beans. Consider selling a $6.25 or $6.50 call option for 30 cents-plus. If the market goes up, you end up with a sale at a decent price. If the market goes down, you have 30 cents to work with to establish another strategy.

Volatility that comes from weather or reports should be used for cash contracts, or maybe puts, if the price gets right.

If beans get too cheap between now and harvest, we'll probably have to use loan deficiency payments and sit on them until spring 2000. I wouldn't forward contract more than 15-25% because if a major rally happens, you'll still have flexibility with the rest of the crop.

If the market gets bullish, buy back the sold calls and wait.

Expect a shift from cotton and wheat to beans, pushing U.S. acreage up by 1-2 million acres and possibly lifting the carryout to 600 million bushels.

November beans could range from $4.60 to $5.60. So educate yourself and pick someone to work with who understands the tools. Otherwise, any volatility will cause you to second-guess and get beat up. Learn how to use marketing tools if you want to survive.

Jim Gill, president of Marketbell Enterprises, Bloomington, IL.

Use the Chicago Board of Trade charts available on the Internet. They show basic moving averages to signal the direction of the market.

When the market turns up, use the upside down triangle method to price the balance of old-crop and any new beans you want to get priced.

For example, sell 1,000 bu of beans at $5.80, 2,000 bu at $6 and 3,000 bu at $6.15, etc.- spreading out sales in at least five increments.

The time approach to use for cash-flow needs is to price around the 15th of each delivery month.

Avoid the week before first deliveries, since that's when the market is usually selling off.

Also, don't price more than 40% of your crop in cash contracts prior to harvest. Expect November soybean futures to range from $5.75 to $6.50.

On the weather front, the year 1998 was the warmest on record. La Nina will show its pattern of extremes. Europe is extremely cold. The Asian economy is slowly improving, so watch for increased shipments to that region.

And if Congress fully utilizes the Conservation Reserve Program, it could remove extra acres, which would be critical for the springtime rally. Keep in mind, we always use more feed grains than expected when prices are low and the extra supplies can be quickly used up.

Ron McDaniel, market analyst and broker with Abbott Futures, Inc., Minneapolis.

Price 25% of your new crop when November futures range from $6.10 to $6.25, then up to 40% at $6.40 with futures or options - maybe some cash contracts, depending on the basis.

Expect a big shift from wheat and feedgrains to soybeans, which could sharply increase planted acres and become the overwhelming factor throughout the year.

In addition, expect the Asian economy to rebound, and for China to potentially be a bigger oilseed buyer than we think.

Only drought, which is not a real demand, can help rally the market.