Market News & Headlines >> Brock Consultant Katie Hancock's Blog: Make the Sale Count
Insights from Brock Associates Consultant Katie Hancock
Last week I said to consider the impact of small sales.
Small sales. It’s easy to pull the trigger on a small volume, but how much you sell is just as important as when you sell it. I am willing to bet many producers have sold some beans on the recent rally, but how much is in question.
Let’s say you sold 10,000 bushels of soybeans at $10 and expect to make 100,000 bushels total.
Scenario 1: Beans rise to $11 on unsold bushels. You’re average price is now $10.90.
Scenario 2: Beans fall to $9 on unsold bushels. You’re average price is now $9.10.
Scenario 1 is ideal, but scenario 2 means you may have gone from a profit to a loss.
Remember a small sale is a drop in the bucket when managing price risk. The risk is small and so is the reward. Volume is a simple concept, but may save the day in the end!
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