02-03-2013 10:25 PM
This might sound dumb, but I track inputs, and grain prices together, with the idea that I can buy my fertilizer for X number of bushels, as an example. Then, I sell or contract that amount of corn, and also contract my fertilizer.
With my extra bushels, I can then kind of play the market. I like to sell some early, and save a little into summer. How much, is almost as much a gut feeling as any, and I'm wrong as much as right, but by splitting my remaining bushels, I am usually at worst, half wrong. However, a baseball player batting .500 is considered a 'star' player, so I try to look at it that way.
02-04-2013 12:37 PM
02-04-2013 03:56 PM
Sort of. I mean, if corn was $8 right now, I'd have it all sold already, but when I am doing my 'step up' sales, I have a goal that 'if corn hits $7.40, I'll sell enough to pay my seed bill', and if corn hits $7.50, Ill sell enough to pay my expected fertilizer bill (and then try and contract fertilizer that same week). I keep track of inputs, so I have at least a rough idea how much I have to sell. My goal, is to have all my inputs covered, by the time I plant, and that way, I don't have to make any rush sales, because of upcoming bills. I have my own bins, so I will sell the carry, if there is one, out until the bills are due.
As an example, last fall, I got an early seed booking price, before harvest even started. I checked my fields, and was confident I had enough bushels there to cover any previous contracts, plus enough to cover my seed. I got over $8 a bushel, for that corn, and only used around 12 BPA to cover my cost of seed. That was the best price of the whole season.
Had I not booked my seed, I likely would have sat on my corn, which has yet to come back to that price.
I guess, in a way of saying it, is when I decide to sell, I use my expected input costs, to decide how much to sell (pay rent, seed cost, 1/2 of fert costs, all of fert. costs, etc) and go down my list until all inputs are covered.
From there, what bushels I have left, I will usually wait until after harvest so I know how much I have, and then I can play the markets until August if I want to, with all my known costs already covered.
02-04-2013 08:17 PM - edited 02-04-2013 08:23 PM
I would call that the real fundamentals. Thanks Nebrfarmer, We do something very similar to that. We try to make it sound more complicated, but when you get right down to it--------------- I like your system.
I watch charts and try to look for the technical while I am figuring the break-evens and cost projections. It seems to me that technicals tell us when markets need to move and what direction they are leaning----------- then fundamentals give us a feel for the strength of the move.