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| Very good advice & additionally, I like keeping a crop marketing calendar. I would say that the majority of farmers look at a 18 month marketing calendar (spring before planting, up to the summer after harvesting). With the majority of the marketing happening in the last 9 months (a few sales ahead, but over 50% unpriced at harvest). If you can extend that calendar out to a longer time period, you pick up more opportunity to price at advantageous levels - not to mention, the carry always makes an early sale look better than a spot sale. So if you can start looking at pricing grain for Summer 2012 today, you can have a better perspective. For example, Dec 11 corn closed at 4.03 today & you should expect at least another 30 cents carry out to July 2012. This should get your hedge price to over 4.30, when nearby futures are at 3.50.
Does 4.30 corn make for strong profits for next crop year? I dont know, but in the next 6 months your seed dealer & fertilizer rep will be expecting to have committments in place. Now, you'll recall that in 06-07-08, your forward sales from 1 year + did not look very good. For this reason, I like pricing with a fraction approach. Example = if you are pricing 10,000 bushels of corn in a bin or DP, consider selling 5,000 of new crop & 2,500 of the following crop year (Apply quantities that apply to your operation). As time goes on, I suspect you'll find that some of those early sales will be the highest price. If you do not like today's price, place open offers above the market & start locking it in!
Edited by Illini Corn 6/3/2010 17:26
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