I’m forgetful.
There, I said it. I’ll own up to it… And now the Farm Guy Next Door just heard (read) me admit it.
I have to write things down or else it’s like they disappear into thin air and are never found again. (i.e. some things the Farm Guy Next Door tells me and I fail to retain.)
Maybe that’s why I’m the self-proclaimed queen of to-do lists.
I love a good list. If something is written down, I won’t forget it. Not to mention, the list gives me something tangible to refer to and gives me the satisfaction of being able to cross things off.
When it comes to grain marketing, I’m not great at committing specific dates and prices to memory.
I’m not the girl who can answer questions like,
“What was the elevator paying in January?”
or “Exactly how much has the corn futures price moved in the last month?”
or “What was harvest basis back in July?”
off the top of her head.
What I can do, however, is find the answers if they’re documented.
And that’s the reason it’s so important to track cash bids consistently and regularly.
When I say ‘track cash bids,’ what I mean is to keep a record of what the bid was at a grain buyer for a specific delivery period on a certain day.
The frequency in which you track bids is flexible.
You could track bids daily for the grain buyers you care most about. Or, you could decide to track them weekly on the same day and time each week.
The important thing is to document the bids in a place that will make it easy for you to access and analyze. Personally, I like spreadsheets.
Tracking cash bids consistently helps you learn about the facilities you deliver to and understand price trends once you build up a data set.
Think about this, if you’re just starting to dabble in the marketing on your operation, chances are, you haven’t looked at the cash bid sheets for your local grain buyers for all that long.
Thus, it takes some time to get familiar and understand things like:
What’s the ‘typical’ basis level for harvest at the facility? When was the cash price for delivery in January at its highest over the last year? Has basis been steadily getting stronger or weaker since harvest? When was the best opportunity to sell our stored grain last year – did we miss out or did we sell something close to that price?
When it comes time to decide if basis is weak or strong, or whether the cash price is higher now than it has been for the past couple of months, how are you supposed to know?
By tracking bids, that’s how.
Here’s how to get started:
1. Pick 2-3 grain buyers (or more!) that you want to track bids for.
2. Pick the delivery period(s) you want to track.
i.e. Do you want to watch the spot price (AKA the price they’re posting for delivery for the current day), the harvest bid, and/or another delivery period you typically make sales during?
3. Each day, or each week on a specific day, document the full details of the bids you’re tracking from each buyer’s bid sheet.
4. BE CONSISTENT – I suggest setting a reminder in your phone
EXAMPLE:
Let’s say I’ve decided to watch the SPOT & HARVEST bids for the Cargill & ADM facilities near us.
I’ve decided to track cash bids every Monday at 3pm.
It’s 3pm on Monday, so I go to Cargill’s bid sheet and I copy down the bid information (delivery dates, futures price, futures month, basis, cash) for their spot and harvest bids for soybeans and corn in a spreadsheet.
Then, I access the ADM bid sheet and I copy down the same information for their spot and harvest bids in the spreadsheet.
For all bids copied down, I make sure to note the current date I documented them on.
Then, I do it all over again the following Monday…and the following Monday after that… 🙂
All in all, tracking cash bids will help you:
1. Become more familiar with your local market
2. Understand price trends
3. Create a resource to refer to when you have questions about when and how prices have moved or want to understand price trends
Wish you had a framework and someone personally leading you, step by step, through bid tracking to get you started?
I get it– I like more specifics and an easy to follow template too! Because of that, I have a whole module dedicated to teaching you how to track cash bids, step by step, in my new, online course that will be opening for enrollment on DECEMBER 6TH!
P.S. The course includes a bid tracking Google Sheet template too!
To stay up to date on the course details & to be notified when the cart is OPEN for signup, join my email list here! http://eepurl.com/gjiPEb