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Friday, February 17, 2012

Grain Marketing

Ok, I guess I am mentally challenged. That is the only conclusion I can come to after years of studying, reading, and trying to understand grain marketing. Terms like positive and negative basis, spreads, put options, hedging futures.......etc. It just makes my head spin. I have a very basic concept of what those terms mean but really no idea what difference it should make to me when I am making the decision to sell my grain in the bins.

My decision to sell is based on what the figure is going to be on the cheque I receive and shouldn't that be all I really need to know? Whether I decide to sell at today's price or lock in a delivery for next September, the bottom line should be , what is the net price per bushel that I am going to receive. All those other confusing terms and useless information is just needlessly complicating my life but to read the ag forums where all these "experts' talk about marketing grain makes me feel like I am hopelessly living in the past with my old fashioned ideas.

Having said that I have just locked in a couple of loads of canola today for a very good price. I neither know or care what the "basis" is on that grain. All I know is that I need to deliver the grain within the next two weeks and I am happy with the price I will receive.

In other news, our drought continues. The little snow we have is staying with us but is the least amount I have ever seen in my life. Still over two months til planting time so no panic yet but if this "dry spell" continues into the growing season there is potential for problems. But like the old timers used to say, "I've never lost a crop in February yet. "
Looking back at this photo from ten years ago, we didn't have much snow that winter either but the rest of the year and crop turned out just fine.
West hill

2 comments:

  1. Things are manipulated so the big boys make the money, not the farmer.

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  2. With all the water you've had in the last few years, might be good to be a little bit dryer (but not too much) to dry things out.

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