Last week I stood in my house, which needed a SERIOUS deep cleaning in virtually every room, and felt as though I couldn’t move an inch.
My friends were coming over the following evening, so there was an urgency behind me needing to start doing something.
But instead, there I stood.
Excited to host, yet paralyzed to prepare for it.
The single thought I had was…WHERE DO I BEGIN?
That’s a little bit (see: A LOT) like how I’ve been feeling when I look at the corn and soybean markets. As #noplant19 progressed and the market started paying attention to the lack of planting progress, a ride unfolded.
While I’ve felt more optimism than I have in a long time, there’s still a lot of uncertainty.
I don’t know about you, but the uncertainty is what paralyzes me.
I looked back at the December corn contract (CZ19) to see just how much corn has fluctuated in the past 6 months.
From December to approximately April, the contract had fairly non-eventful trading days and fluctuated in a narrow range.
From April to the mid May, the corn market started to tail off. The CZ19 contract fell from its close at $3.8475 on 3/29 to a close at $3.72 on 5/10. This price decline came on the back of news with the expectation of more corn acres and a seemingly decent setup for planting conditions.
Since May 10th, the market has been pushing above key resistance levels it had previously been stuck behind and kept moving up — whoo hoo!
But wait, now what?!
I don’t know about you, but I wasn’t expecting a rally.
I was expecting another year like the last few.
I thought we’d see a short-lived bump in price at some point before July, and try to capitalize on it. But now, now there’s some renewed hope…and still a ton of uncertainty when it comes to trade relationships and supply.
Will yields be way down with late corn and soybean plantings and planting in less than ideal conditions?
Will we see a trade resolution with China and an uptick in soybean exports?
Will the border and tariff talks with Mexico get squared away?
What will the weather provide during the growing season?
These questions all roll through my mind as I read article after article about the topics.
As I’ve tried to balance optimism with the reality of running a farm like a business, there are three things that help me center my thoughts about marketing. Hopefully they’ll give you (at least a little!) clarity too!
- Remember, you’re in this to make a profit. If you look at the market and there’s an opportunity to sell and hit one of your profit goals, consider doing something to reduce risk. Maybe you’ll sell cash grain, maybe you’ll buy an option to protect a price without committing to a full cash sale. However, whatever you do, always consider profitability, first and foremost.
- Be cautious about putting all your eggs in one basket. Even when it seems like many signals point toward the price moving a certain direction, the market doesn’t always react the way you expect. Keep that in the back of your mind and make decisions that don’t revolve around betting the farm on a ‘feeling’.
- Stay up on the news in the ag industry and gather your news from various sources. Since much of the marketing content you will read is opinion driven, try to gain perspective from multiple sources. You don’t want to become too siloed into one person’s opinion on where the market is headed.
These aren’t recommendations. Rather, they’re things I’ve been considering as I’ve watched this market.
Farmers have a lot of experience riding the market rollercoaster, but sometimes it’s nice to re-center, take a bit of the emotion out of the decisions, and remember what the real goal is– it’s not to out guess the market.
No, it’s to make smart decisions that keep you in business for the next generation.
I’m curious, what marketing decisions are you making in this market environment?
Are you waiting it out before you make any moves, or are you making incremental sales at price targets you’ve been waiting for the market to reach?
Comment below or message me on Instagram at @nefarmgirlnextdoor!