Weekly Grain Update – October 24, 2017

 

10/24/17

Many of you have interest in storing your corn or beans at the co-op, and I thought I would take a minute to summarize our storage programs again for this fall as many are asking about specific details.  Please remember that Delayed Price is your most economical choice for us to store your grain.  For grain placed into Delayed Price, the grain is only shrunk down to 13.0% on beans or 15.0% on corn, the storage rate is cheaper, and the monthly storage charge follows the grain and is not invoiced monthly.  Monthly storage charges are simply taken out of the settlement when the grain is sold.  The biggest disadvantage to Delayed Price is that you give up title to your grain in exchange for the above benefits.  This allows us to move your grain out of our facilities if you have not priced it yet, and it keeps us from plugging up with grain.  There is no time restriction for grain placed into Delayed Price.  You may keep your bushels in this program for as long as you wish.  There is no “dumping” fees or any other service charges associated with Delayed Price.  Here is a summary of what storage programs we are offering this harvest:

DELAYED PRICE:    Beans will be shrunk and dried to 13.0% moisture and corn will be shrunk and dried to 15.0% moisture.  Delayed price charges will be 4 cents per bushel per month until 10/1/18, and deducted from grain settlement.

OPEN STORAGE:    Beans will be shrunk and dried to 12.0% moisture and corn will be shrunk and dried to 14.0% moisture.  Storage charges will be 5 cents per bushel per month until 10/1/18, and invoiced monthly.

GRAIN BANK:    TO BE USED FOR FEED ONLY.  Beans will be shrunk and dried to 12.0% moisture and corn will be shrunk and dried to 14.0% moisture.  Storage charges will be 5 cents per bushel per month, and invoiced monthly.

As you can see, our minimum charge for bushels placed into Delayed Price is 4 cents per month.  Additionally, if you price your bushels within 7 calendar days of delivery, we will waive the 4 cent fee.  If you look at the competition, their minimum is 15 cents, and they will shrink your bushels down to 12.0% on beans and 14.0% on corn no matter the storage option you choose, despite what their traveling grain originator might tell you.  If you have any other questions, please call me and I will be happy to go over the programs with you.

What’s Happening in the Market

We finally started to see a short covering rally in the corn and wheat markets on Monday.  I get the feeling that the funds are having a hard time pressing the corn market much lower given the difficulty to buy cash corn from the farmer.  Futures began to rally on Monday, and buy stops were being triggered.  As the funds start to cover their short positions, this buying is pushing futures to work higher.  This is a perfect opportunity for you if you need to sell more corn for this calendar year.  I would place a target 5-10 cents above the market and let it work a few days and reward the market on a rally.  Please remember, this is NOT a time to get bullish, but a time to take advantage of the small pops in the market as they come along.  This is why targets work so well.  At 3 am in the morning, we could see a pop in the market, then you can sell your grain while sleeping in bed.  It doesn’t get much better than this.  For those of you with bins at home, now is the time to watch the May – July corn bids, and put targets out there as well.  The market is currently offering 20-30 cent carries to July, but you must be willing to forward contract these levels today, and lock these prices in today, as they will evaporate over time.

For those of you who planted wheat over the last month, now is the time to start looking for opportunities to forward sell your wheat crop for July – August delivery.  On Monday, we witnessed the wheat market pop up 12 cents at the close.  We now have July / August wheat close to $4.15 cash for delivery into Readfield.  The wheat market has been making a bottom, and looks to be working higher.  Personally, I would put a target to sell at $4.25 cash and then place additional targets every 15 to 25 cents higher and keep rewarding the market when it does rally.

I encourage all of you to use targets to generate more profits for your farming operation.  Many times, the high of the trading session occurs during the 2-3 am timeframe when we are sleeping.  Targets allow you to take advantage of these short opportunities.  Let’s figure out what level you feel comfortable selling, and then either call us or simply use our online target system where you can place a target all on your own.  I firmly believe in rewarding the market when it rallies, and if a target gets filled, simply place another target on beans 20-25 cents higher or 10-15 cents higher on corn or wheat.  Our online target system is simple, easy, free, and we have many people using the system today.  If you have interest, please click here and it will direct you to our online offer center.  If you have any questions, please call us at the Readfield office, and we will be happy to walk you through this process.

As always, if I can help you with anything, please call me at Readfield.

Marcus

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