Market News & Headlines >> Marketing Strategy: Know your selling window
By Katie Hancock
Corn producers are watching weather the next couple of weeks. It’s easy to take a wait and see approach. I’m doing that a bit myself, but I suggest drawing out a timeline to keep your personal situation in perspective. Waiting may be the best strategy, but the goal is to know the selling window.
What do I mean by a timeline? I’m thinking the KISS method- Keep It Simple Stupid. I’m thinking a kid-quality, straight line drawing with dates underneath and bushels sold above. At the end of the line, have total expected bushels and the date to be completely sold out.
What am I trying to accomplish? I don’t want to run out of time. I want to see how much I need to sell by a certain date. I don’t know about you, but the months tend to fly by in personal and business life.
I personally like averaging my sales. Some don’t. Regardless, it’s not fun to be at the end of the game with no choice but to sell. Let me share a couple examples.
Jessica can store 75% of her crop and has excess operating cash. Jessica’s timeline is long. She’s able to wait 12 months to finish selling her corn. Why rush selling corn today because it’s not above her break-even and looks promising in the future.
Joel has no storage and needs to pay cash obligations in the fall. Off-farm storage would be an option if he didn’t need 100% of the cash. From today, Joel has two months to sell. He doesn’t have the same flexibility as Jessica. There is more pressure to make a sale today, next week, and maybe the next regardless of break-even. Otherwise, Joel may be at the mercy of the harvest spot price--good or bad. Getting himself trapped in a corner is a hit or miss game--especially considering weakening basis trends at peak season.
The other Brock consultants and I discuss things like price direction and risk management with each client too. Still, the most important question is the selling window. We would encourage Joel to be more aggressive than Jessica, primarily due to his limited timeline.
I recommend making a timeline today. Keep your perspective. If you want to wait out the weather, go for it. If you want to sell into it, go for it. The timeline doesn’t tell you when to sell, it simply makes sure time doesn’t sneak up on you.
-Email Katie at [email protected]