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Commodity Marketing

Posted: July 3, 2012

O.K. - I bet you didn’t think we’d see harvest corn near $7.00 and soybeans above $14.00 twice in one marketing year. Do you recall the feelings you may have had when you thought the season highs were behind us just a few weeks ago and you hadn’t priced enough 2012 crops, yet?

Additionally, we have witnessed significant price risk for this fall’s crops, so far. As an example, the DEC corn contract has traded from barely $4.00 for several months early on, and then went to over $6.50 only to plunge to $5.20, and even more quickly inflating to its current $6.62. Some believe the 2012 cost to grow corn on high yield ground is around $4.50 per bushel. If this is true, there have been opportunities to price our 2012 corn and soybeans at profitable levels.

Whatever the reasons could be for current price levels, whatever reasons for prices to go higher (or lower) - my point is to recall our cost of production, consider our expected harvest, and using our RP crop insurance guarantee as part of our marketing efforts; it could be time to consider going ahead and pricing some more 2012 corn and beans. Not everything, but more than what is already priced. Of course, we do not want to get too much of our unknown 2012 harvest committed. “It’s not in the bin, yet!”

Maybe we have too much 2012 grain committed already? Consider learning more about CALL options (if you need to). These pricing tools are intended for producers trying to capture favorable price moves.

Remember, regional PA cash grain prices are updated weekly and can be found at: http://www.ams.usda.gov/mnreports/ln_gr110.txt

Chicago Mercantile Exchange with ag futures and options prices can be found at: http://www.cmegroup.com/trading/agricultural/

Contact Information

John Berry
  • Agricultural Markets, Lehigh County