Volatile futures markets, fluctuating currencies and shifting spreads can make marketing your grain a difficult task. As you’re marketing this year’s new crop here are some tips to help you stay on top of your marketing game and up to speed with your local elevator.
Using Futures & Basis to Your Advantage
It is important to understand the separate forces driving the futures and basis components of the cash price. Watching each component separately will let you make good decisions regarding how to contract your grain and help you decide between selling cash, locking in the basis, hedging the futures or knowing when to just sit put.
Know your Quality
The international nature of modern agribusiness creates a diversity of desired quality specifications. It is important to not just know your grade, but the specific factors affecting your grains and oilseeds. Depending on end-user requests your local buyer might have some wiggle room to pay above grade. Further, knowing your quality can potentially create opportunity to take advantage of grading differences across the border. One particular quality specification to keep close attention to going forward to is vomitoxin. With the spread of fusarium across the prairies becoming more prevalent, vomitoxin levels are becoming more of a hurdle for sellers and buyers alike. Getting a lab test to determine the vomitoxin level of your grains may give you a leg up in negotiating prices with grain buyers. Talk with your local buyers and keep an eye out for potential opportunities to market your grain beyond the traditional CGC grading specifications.
Keep Up With The Markets
Volatility in the futures and currency markets can be your best friend or worst enemy. In today’s world, markets can make rapid gains or losses in the blink of an eye. Keeping a daily tab on the market can help you capitalize on these potential gains when the market rallies.
Manage Your Pricing Targets
Pricing targets can help you take advantage of market rallies but must be carefully kept track of. Double-booking your grain can result in unnecessary losses. Be sure to take note of expiry dates and keep in contact with the elevator.
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