One of the hardest things to deal with at harvest is knowing what to do with access grain. With increased supply of corn and soybeans, many farmers will have to make a decision to either store their grain or sell it off the combine. The proven long term strategy is to always build your own bins and store it yourself. But this article is for those who don’t have that luxury.
Electronic trading in the past 10 years has boomed into one of the major ways to buy and sell commodities. Previously all trading was done human to human interaction. Now most of trading is all on the computer. This has brought in new competition and market participants. With new market participants, it changes the way prices moves. In this article I will be explaining how electronic grain trading has changed the ways farmers market their grain.
CME group is the one of the largest grain exchanges in the world. It provides hundreds of different contracts to trade by matching buyers and sellers. To understand how electronic trading has changed the way to market grain we need to understand how much trading is done on the exchange
Recently there have been many new Ag Tech startups that have hit the market. In the last 5 years we have seen a surge in software apps that try and help farmers with their businesses. In this article we want to give you more insight to these companies on how well they have changed the market and also some things that are not noticed.
Here is a list of the top 5 new software companies that we believe have started to change the Ag world:
These companies have recently popped up due to startup funding. They are in business to develop software to help farmers become more efficient. The number one thing they provide is massive amount of data to better raise row crops. They have seed analytics, rainfall mapping, fertilizer analytics, crop health imagery, and much more. These types of analytics are priceless for farmers.
However, one thing they don’t have is new ideas for marketing grain. Some of them are promoting how great their “marketing” plan is, when they don’t really have a plan. The only thing they do is put in place cost of production, estimated yields, and break evens. These practices are not new; it is re-inventing the wheel, but it has already been done.
The key factor in grain marketing is the ability to think like a trader. Not just allow the farmer to input their costs. The farmer can already do that with a paper and pen. The only thing these companies have done is make the process look pretty.
Many grain marketing companies talk about how well they sell grain for farmers. They tell you the average price sold and how “great” their sell signals are… but how do they determine if they did a good job? Did they compare it to the actual farmer’s business?
Anyone can say they have done a great job without comparing it to something; this can be misleading to farmers and their profitability. So what should farmers do to help their business?
Crop-Side Marketing is the answer. Not only does Crop-Side Marketing help farmers sell grain on a personal level, but we document every single sale. We benchmark our sales to their business. We put ourselves in the farmer’s shoes and show them how to market grain better.
One key factor when selling grain is understanding the price movement. There has always been an ongoing debate between fundamentals and Technical Analysis and which is more important. You do need both to fully understand where to price your grain. However, I believe that Technical Analysis beats the knowledge of fundamentals. Pricing grain would be extremely hard without knowing where prices have been and how much have traded. In this article I will be explaining some basic components of Technical Analysis and how knowing this information can help market your grain better.
Trading the grain markets can be overwhelming. How do you know where to even start marketing your grain? In order for a farmer to be successful they must get in the mindset of a speculative trader. Crop-Side Marketing wants farmers to be able to think like a trader. In this article we describe the importance of having a marketing plan that understands trading order flow.
One main goal for Crop-Side Marketing is to get farmers thinking like traders. Going into the New Year, we will be discussing how to take an average farm and turn it into a trading portfolio. Now some of you may be thinking that this is crazy. Why would a farmer need to think like a trader? Well, one main reason is that each farmer has major risk exposure to the grain markets. A lot of time farmers do not see the risk of their physical grain in a dollar amount. Prices go up and down, but not a lot of thought goes into how much they are losing/making when the price moves a certain way. Where as if you had a trading account, this is in your face and very real. When you start to see the money in your account rise or fall, you get the reality check.
Since the year is coming to an end, it's important for us to look back on what we've accomplished and how we can improve. So, I read through all our previous articles in effort to find what I thought was most important for farmers to keep in mind for the future. It's not a statistical study or a technological discovery. It's insight into how we all think and how it may be holding us back. If you'd like to learn something about yourself today that could help you become a more profitable farmer, help yourself and invest five minutes in this article.
First, I have to give credit to farmdocDAILY for today's research. As part of the University of Illinois' Department of Ag & Consumer Econ, they've hit the nail on the head this year. And that nail is farm costs. We're talking about cost cutting on the farm so get out your budgets and let's review. If your main worry is how long prices will remain this low, we've got some information regarding that too, so join us for 2016 preparations.
If another farmer told you, "The average performance difference between cash only marketing programs and futures and options marketing programs is quite small," would you believe them? According to The Pricing Performance of Market Advisory Services in Corn and Soybeans Over 1995-2004, its true. In general, the actual benefit of a futures/options plan over a cash only plan is 1¢ per bushel for corn and 7¢ per bushel for soybeans. If you'd like many other brow raising facts like these, today's article is for you.
DTN AgDaily used to display a statistic stating that, "...USDA statistics indicate farmers sell two thirds of their crop in the bottom one third of the crop's annual price range." So, if you're a farmer, what can you do to get into the TOP one third? Should you do it yourself, or hire one of the many marketing services available today? Here's some must have information on marketing service performance before you go shopping for one. P.S. We outperform.
I've been reading a lot about the hustle and bustle in land values and cash rents, and it has not been good. However, very recently, there have been some changes on Illinois' farmland value outlook. If you'd like to read about one of the biggest land deals in Illinois history, as well as some of the fundamentals and trends in Illinois farmland, stay tuned.
Today's post will be the first in a series we're calling "What's New". No more than once per month, this series will highlight the latest scientific discoveries in the field of agriculture. We'll comb the scientific online community for most important upcoming changes to the farmers world. Breakthroughs in preventing root rot caused by phytophthora, and improving photosynthesis are today's highlights. P.S. There's a huge punchline at the end.
After our last article on grain reports, some of you may still not be convinced of the small value we think they have for farmers. In honor of those folks, we decided...not to do very much work. Instead, we'll look at some charts and discuss some theory. The simple rule we think farmers should abide by regarding grain reports is NOT TO TRADE during or immediately after their release. More about why and when you should trade below.
Who are grain reports important to? Everyone! Reports are necessary for the most accurate price discovery. For folks directly effected by the import/export market, reports are great tools to forecast sales or provide insights whether to expand a facility sooner rather than later. However, for the common speculator or farmer, the upside is not so obvious. This article looks at whether trading futures before, during, or shortly after (2 minutes) big grain reports is a good idea.