A grain marketing masterclass
For grain marketers who know there’s always more to learn.
Take your grain marketing game from simple to sophisticated
Selling grain is the only way to make a buck in the business of farming. But let’s be honest – everyone is not created equal when it comes to grain marketing. Some love it. Some loathe it.
No matter what camp you’re in, you can probably appreciate the financial and mental benefit of building confidence in your grain marketing skills.
Even a small boost to your marketing game can pay dividends, both at the bank and in peace of mind. Are you ready to:
- Take an honest survey of your own situation?
- Employ some forward thinking and basic planning?
- Learn how to interpret market intelligence?
- Stay flexible if you want to make decisions that lead to sustainable profitability?
The Grain Marketing Academy is designed for you.
It takes you all the way from the basics of grain marketing to more advanced techniques over the course of six simple lessons. Use every one, or pick the ones you need.
The best part? No exams!
Effective grain marketing begins before a bushel is sold. But you need to get it all calculated and recorded to help you make profitable grain marketing decisions.
Over the years, MarketSense advisors have seen these four critical actions pay off for their clients when emotions run high.
This is the only way to know your true break-even levels. Record it all as accurately as possible and remember to include costs that are often overlooked, like equipment payments, taxes and even your time.
Understanding your true costs will help you recognize profitable sales opportunities. But be realistic. While it’s not always possible to achieve the profit you want, it’s key to know your break-evens so you can achieve your goals.
Based on the pricing targets you want to achieve and the commodities you’re selling, you will have a number of ways to market your grain to reach those targets, including the cash market, options, and hedging in the futures market. Futures and basis levels, commodity market outlooks, and global and local market factors help determine which is right for each situation.
No two grain marketers will have the same appetite for risk. For you, it comes down to assessing your tolerance for swings in the market (volatility), and the impact on your bottom line.
There are different marketing contracts available with varying levels of complexity and risk, and you need to have a firm understanding of how a particular tool or strategy works before making a selling decision.
Too often grain deliveries are either delayed in hopes of a rally or become necessary due to the need for cash flow at a particular time. But you can take control of timing and more easily manage those financial obligations.
Separate grain pricing from delivery by forward pricing a set number of tonnes before harvest when there’s a glut of grain flowing into elevators.
Because grain marketing is cyclical, you can also use historical information to show when basis levels are typically low. Think about basis as a separate pricing decision.
Pro Tip: Set aside a number of tonnes to carry into the summer unpriced to sell during a potential weather rally.
Goal planning should look beyond one year at a time. Develop a three- to five-year plan to help you lay a foundation for long-term success.
If you are working toward a specific goal – say expansion or succession – this may affect your risk tolerance as well. Consider consulting a professional advisor who follows the markets and provides advice for a living.
Make the Grain Marketing Academy part of your plan
So you want to build a successful grain marketing plan. We’re happy to lend you our notes! Enroll in the Grain Marketing Academy to get personalized tips and tricks delivered to your inbox.
Study the Markets
Maybe you’ve got your own situation nailed down and you’ve set some goals. You’re halfway there.
You also need to understand other factors affecting grain markets. Commodity prices can change rapidly, and the factors moving the market this week may become irrelevant the next week. There are plenty of sources of information out there, but we’ll help you cut through the noise to keep track of what’s most important.
The United States Department of Agriculture (USDA) and Statistics Canada release reports on planting progress and acreage, on-farm stocks and carryout on every commodity produced in North America throughout the year. Who has the time or inclination to track the dates of each report or to decide which ones matter most?
Save yourself the hassle by posting them near your desk or saving them directly to the calendar on your smartphone. The Marketing Academy has made it easy.
Grain merchants and other marketing experts use a language all their own. If you’ve been farming for any length of time, you’re probably somewhat familiar with this jargon, but a little refresher can always help. Effective grain marketing begins with speaking the same language. Keep the Marketing Academy Glossary nearby for when the jargon has you stumped.
Commodity prices rely on global supply and demand. Therefore, day-to-day grain marketing decisions depend on collecting and analyzing information about weather, commodity production, politics and the appetite for particular products around the world.
The simplified explanation is that markets rise because buyers are purchasing commodities at higher prices whereas markets fall because sellers are making sales at lower prices. But in reality, it’s farm more complicated than that.
You need to understand the interplay between the major grain producing countries and the political decisions that will move a market to help you time your sales.
Get your cheat sheets from the Grain Marketing Academy
If you don’t have time to translate every report or study the markets, enroll in the Grain Marketing Academy to get six personalized lessons delivered to your inbox – no cheating required!
Develop discipline with these Grain Marketing Academy tips
Constantly revisit your plan. You could be selling three crop years or more at any given time. Be flexible without giving up on the goals you set earlier.
Avoid being greedy
Beware of wanting to capture every cent. Your plan should be designed to capture profit. If you begin stalking the markets your profit could go down with them.
Psychologically, percentages sound like less of your overall crop than tonnes do. As the year progresses, base your decision on what percent you've sold.
Work with a partner
A professional advisor is not emotionally invested in your grain, but they will be invested in your success. They also work with grain markets on a daily basis.
Graduate to the Grain Marketing Academy
Become a master grain marketer. Take our quick entry quiz to enroll in the Grain Marketing Academy and get our short, simple lessons delivered to your inbox.