Some of us believe that the hardest part of grain marketing is creating a marketing plan. But I think it’s safe to say that sticking to the plan, or what we call “executing the plan,” may be the most difficult thing to do. It’s not because the plan is difficult to execute – rather, it’s because it is emotionally hard to sell when there are so many uncertainties. We see the market volatility increase and are paralyzed by it. Then we simply question whether the plan is good enough for this year, and often miss out on catching profitable prices due to fear.
Here’s what it all boils down
Here are some tips from the Cargill MarketGuide experts to help you stick with your plan:
- The plan you started in the winter is not the same now. Don’t abandon the plan; review and adjust it to represent demand or weather changes, and take advantage of market realities.
- Think about using a
floorcontract with an upside. This avoids paralysis in wondering what the market may do, and establishes a minimum profit with the floor, accompanied by the potential to capture more on a market upswing.
- Use percentages instead of bushels – psychologically, percentages often sound like less of your overall crop than actual bushels do. And as the season progresses, base your sales on the percentage outlined in your plan. Consistency pays.
- Quick ship basis
opportunitesarise at ethanol and processing plants early in the summer. If you can deliver, this is often an easy way to capture higher prices.
- Do your best to avoid the bait of capturing every nickel. Your plan is designed to capture profitable levels. If you abandon your plan and begin stalking the markets, you may get to a point where you don’t sell at all. Bushels remaining in the bin will fall victim to last-minute, low-profit sales ahead of harvest.
- Finally, don’t forget to take care of the basis – it’s easy to get caught up in weather markets, but you’ll have cash flow needs throughout the year. Be early to capture a good basis when they hit.
When you take the time to set goals and develop a plan, you owe it to yourself to execute that plan. FOMO – or fear of missing out – is real. But it’s a state of mind. Work to overcome that fear, because the most disciplined grain marketers are often the most successful ones.
Our program, Cargill MarketGuide™, is offered by Cargill Commodity Services, Inc., a registered commodity trading advisor and