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Dec 04, 2018

Winter Blues?

By Megan Tusa - Grain Marketer

As we finally wrap up harvest, many of you are sitting on what was a less-than-average crop. Corn yields just didn’t tally up in most of our territory. Due to the local shortage of corn, we have seen corn basis begin to creep up after harvest. Both rail and processor markets have had to improve basis to cover their needs for the nearby months, while farmers sit with corn in the bins, waiting for a market move.

As of this writing, we are all eagerly awaiting the results of the G20 meeting and if the US and China can start working on a trade deal. We are also watching the South American crop during their growing season. Crop conditions in Brazil so far are looking quite good. We will see if the good weather continues for the next couple of months.

A couple of things to keep in mind as we go through the winter months:

  • Keep an eye on your bins and get them cored to prevent spoilage. The last thing you want to happen in a low-price environment like we are in is to have your grain spoil and take an even greater price hit.
  • “Capturing the Carry” is a term used a lot in the grain industry. Remember there is carry in the futures market now, but the only way to capture that is to sell the grain for the deferred month.
  • Don’t have your head in the sand. Market rallies can come at any time. Have a plan in place so you are prepared to act on it, should the market make a move. We may not have the best crop in our local area, but there are parts of the US that did have a good crop, so the market doesn’t have to go up.

Our Daily Pricing Program is a great program to help kick the winter blues of grain marketing. Starting in December, we will begin sign up for our Daily Pricing Program. This program takes an average of the market during the historically highest price timeframe of the year. You can enroll old crop bushels that are in storage (either in the elevator or at home) or for new crop bushels that you will be planting in 2019.  Give anyone on the grain marketing team a call to see how we can help alleviate the winter blues and get your marketing plan back on track or discuss our current program offerings.

As we enter the holiday season, I hope you all have a joyous time with friends and family!

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