The Harvest has been bountiful and the bins are filling up or are already full. Now that we are venturing into late fall and early winter, do you have a plan for the grain in that bin? Prices have been depressed from what many have become accustomed to prior to the last couple of seasons. This has caused a pull back in protecting price and managing risks that exist every day. The better-than-average yields we are seeing should help make up for some of that drop in price and improve revenue. The key now is to understand, identify and then execute on opportunities that help ensure profit and mitigate risk. Contrary to what many believe, the market place does not exist to ensure a profit and there is no guarantee that if prices fall they will then return to a price that is at acceptable for your operation.

First off, understand what the market is telling you. This is especially true when it comes to marketing stored grain. Is the market showing a carry or is it flat or even inverted? A carry market is when the market is basically paying you to hold grain off the market place for a period of time. An example would be the market is paying $3.00 for November delivery corn but is paying $3.25 for January delivery corn. The market is paying $.25 for you to hold the corn until January. A flat market would be just that… flat. An inverted market would be the opposite of a carry market. In an inverted scenario the market is telling you to move the grain now as opposed to later. It is also important to understand that a carry or inverted market is not indicative of market direction but only telling you that when you pull the trigger - should it be for delivery today or tomorrow? Carry is only real if you sell it.

Learn and understand all of the tools that are available to you. The market is a dynamic place with many different things affecting each one of those items. Each tool that is available to you has a specific market condition that it performs best in. Minimum Price Contracts also work well before and after harvest to allow you some flexibility of participating in market rallies along with some assurances that you have set a price floor. For help with any of these tools and how to best apply them, contact your local Wheat Grower’s Grain Marketing Specialist.