Grain market sell windows can help farmers increase revenue in 2020

Growers know that selling grain at profitable levels is the end goal, but it’s not always clear when to sell. In fact, it can be almost impossible to know peak sell times without access to actionable data. And in uncertain seasons like this one, knowing the data is critical.

With the USDA forecast of 97 million acres in 2020 corn plantings, projected corn supply for 2020 feels very high right now, especially when coupled with current economic conditions pressuring futures to low levels.  This puts growers in a potential low profit or loss scenario for the year, with current futures prices and break-even essentially the same price for many farmers.

In this type of an environment, it is even more important to have a digital farm management tool that provides a powerful daily view of your farm’s potential profitability. Knowing your farm’s daily forecasted crop size, break-even levels, percent sold, and potential year-end revenue are all key factors to be assessed when making critical selling decisions in 2020.

It’s sizing up to be a potentially tough year for growers, making it even more important to take advantage of any rallies and sell signals to come during 2020.

Main Street Data’s dashboard gives growers a daily view of key farm financial and production data.

It’s sizing up to be a potentially tough year for growers, making it even more important to take advantage of any rallies and sell signals to come during 2020. Those who hold on to it all and hope for the best may barely break even or even suffer a loss.

Main Street Data can help, by showing grain marketing sell windows that can assist farmers in timing grain marketing decisions.

Earlier this season we provided two optimal sell windows for the 2020 harvest that emerged at unexpected times. The first, October, came at a time when growers were harvesting and not thinking about grain marketing for the next season. But those who were watching, and executed, made a solid first sale.

 

Two sell windows for the 2020 harvest came up in late 2019, one in October, and the second in December (shown in green). Taking advantage of these two sell windows resulted in a net profit of $20/acre, or $12,000 for a 600-acre farm.

The second key sell window came up in December – again, not a time when many growers consider marketing, but a time when they have an eye to spring planting and are in agronomic mode. Still, the farmers who had access to this data and pulled the trigger aided their 2020 revenue position.

Superior data tools show these grain market sell windows, throughout the year, with high accuracy.

The science is highly precise and purely mechanical, meaning it isn’t distracted by politics or human interference. In fact, looking at a six-year back test, from 2012 to 2018, this powerful tool netted $.25/bushel over average county sold prices throughout the Midwest.

Even better, well-timed grain market sales can create a lower break-even price for the season.

Growers who made sales during the above two sell windows have already netted an additional $20/acre over current prices, or $12,000 for a farm with 600 acres of corn. Even more importantly, in the above case, the software adjusts the grower’s break-even price from $3.47/bushel to $3.34/bushel for corn. That means this grower can now make future decisions knowing they have a lower break-even price for the season, as well as peace of mind in an increasingly unpredictable growing season.

Break-even price is adjusted after in-season sales are made. For example, the original break-even (or operating cost) for the above farm was $3.47/bushel, but after sales were made in October and January, the new break-even price was adjusted to $3.34/bushel. This is a “true” break-even price, adjusted for profitable sales, that allows the farmer to make more informed grain marketing decisions.

As the season progresses, the true grain market break-even price will become even more important.

Once the critical pollination phase passes, and corn prices are more firmly established, farmers will need to see their break-even price even more closely – so they know how much and when to sell, and at what price.

It takes grit and discipline to farm, and this year, that discipline will be even more important.

When farmers know their ideal sell windows, they can farm with a finer eye to the bottom line. Data makes these sell windows clear to farmers, giving them a sharper look into their grain marketing. Rather than holding it all and hoping for a good price in October, data science allows growers to pull the trigger periodically throughout the season. And this year, those incremental profits could make or break the entire harvest.

Know better, today.

MarketVision creates sell windows based on proprietary supply and demand forecasts coupled with data and technical analysis, and adjusts break-even price as in-season sales are made. See how MarketVision can help you make better grain marketing decisions, today.

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Tim Davis

Tim Davis

V.P. AG MARKETS & BUSINESS DEVELOPMENT

Cooperatives, Grain Marketing Advisors, & Ethanol facilities
217.599.0595
EMAIL

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