When I ask people what they want to better understand about grain marketing, they often respond, “Options. I want to understand how to use options.” Let’s dig into that a bit more. Let’s say I’m new to accounting and I’m just starting to get comfortable filing tax returns for clients. At this point, I’ve filed…
Category: Grain Marketing 101
Winter Resolutions…The Farm Version of New Year’s Resolutions
Now’s about the time when you take a hard look at your New Year’s Resolutions and determine which ones you’ve been following through on and which ones you abandoned weeks ago. I’ll be honest, I’m really terrible at writing down New Year’s Resolutions. I usually think of the areas I’d like to improve on during…
Rolling a Basis Contract: How does it work?
While we’re on a ‘roll’ with the subject of rolling contracts, 😉 let’s check out what happens if you roll a BASIS contract. In the case of a basis contract, you have basis set, but not futures. Thus, your cash price is not established. Understanding what happens when you roll a basis contract can be…
Bullish vs. Bearish – What do these terms mean?
What does it mean when a USDA report is BULLISH or BEARISH for a commodity? You hear it all the time in the industry, “The crop report is OUT! Everyone, it was a bullish report day for beans with yield at “insert yield here” and production at “insert reported production here.” Here’s the problem. If…
Buying an Engagement Ring vs. Pricing a Contract…
Imagine this, you’re a jeweler selling an engagement ring. Yes, I did just come up with this analogy after looking down at my engagement ring. Stay with me, it gets more creative. A fine young man walks into your store and says he needs to purchase a ring. He has one hesitation about buying it…
Rolling to Capture ‘Carry’? What does that Mean?
“Yeah, just roll that contract and capture the carry.” Have you ever heard a merchandiser say that and then wanted to respond, “Uh, come again?” Today, we’re going to clear up your questions so you don’t hesitate the next time you’re in this scenario! In this article, I’m going to explain what it means and…
Bushels sitting at the elevator this year? Why you might consider a basis contract
This year there have been a lot of game time marketing decisions made. If I said I was proud of that, I’d be lying to you. Usually, harvest “game time” decision making is not a place you want to be. Rather, it tends to mean you’re taking a reactive instead of a proactive approach to…
Why you should stop asking “What’s the market going to do?”
Let me take you back to my days of buying corn and soybeans and calling on a customer list of farmers. I’d stop on the first farm of the day and I’d be almost immediately met with the following question, “So where’s this market headed?” Once I’d finish my meeting, I’d leave that farm and…
Are you planning to use commercial storage out of price stubbornness, or are you going to use a more strategic marketing option this harvest?
If you don’t have enough (or, perhaps, any) on farm storage, it may seem like a fairly good idea to pay for commercial storage at your local elevator. You’re simply paying a fee (typically $.03 – $.05 per bushel, per month) to use infrastructure you don’t have, in hopes that price rallies and you capture…
What does it Mean when the Funds are “Long” or “Short” in the Market?
I’m sure you’ve seen something similar to this in market news headlines: “Funds are record SHORT corn” or, “Hedge funds are now LONG soybeans — Where does the market go from here?” What does that even mean? “SHORT corn” or “LONG soybeans”??? And who are these ‘funds’? Let’s break this down using an analogy, my…