Our goal is to help you be profitable and succeed in farming. While we are profit driven organization we use seasonal trends, historical data, and outlook considerations in addition to expected breakeven costs as we make recommendation. We provide a recap of some of our philosophy for the seasonal marketing time periods.
When the "Off Season " time frame provides excellent expected profit opportunities we will recommend taking advantage of the occasion. Our first choice will likely be to use Futures Hedges because of the ability to exit the position with considerable profits and stay open for another price rally and opportunity. We will consider using HTA's, forward sales, or option strategies as well depending on the circumstances and personal preferences.
The "Pre Season" is when we usually will be looking for a chance to begin pricing the new crop and hopefully will have opportunities to price with expected profits. All the marketing tools are on the table including futures hedges, forward sales, or option strategies as well depending on the circumstances and personal preferences. Hopefully the early profitable sales are at lower prices than offered later in the year.
During the "1st half Growing Season" we hopefully will have the choice to price protect nearly 100% of the crop at very good profits. It is during this time period that we usually will want to have all of the fall delivered crop priced with forward sales or HTA's if the basis is exceptionally wide. In addition, we are looking to use HTA's and/or the carry in the market for the balance of the insured crop if good profits are available. The only safe choice for the uninsured portion of the crop is to use option strategies (usually put options) to protect profitable prices.
The "2nd half Growing Season" is when we are looking for the carry to widen to roll remaining farm stored grain priced with HTA's out into the next calendar year or out to next summer. The goal is to capture the carry if it provides enough value to cover storage costs and/or may provide for better basis levels. We also are watching the basis for fall and usually want to get the basis set on fall delivered HTA's prior to full harvest. If put options provide profits or a meaningful floor as compared to loan rates or the crop insurance floor we may wish to protect most or all of the remaining un-priced crop, if we didn't do so earlier.
Once the "Post Harvest" season occurs we are looking to potentially re-own fall commercial delivered grain if sales were made to stop storage costs and were at unprofitable or a low profit level because prior profitable opportunities hadn't existed or were missed. We also may decide to establish a floor price on open bushels depending on price level relative to profitability. We may also choose to just stay open on unprotected bushels in expectation of a post harvest seasonal price rally in to spring.
Just as a "Championship" in sports is usually won because of the prior preparation and the willingness to take advantage of opportunities as they present themselves, we intend to position ourselves using the same type of philosophy. We believe that we are a winner if we have already managed for good profits and are sold out prior to the championship season. Holding grain into this 90 day period represents a make or break type of scenario. Because of the lack of time for a recovery we don't wish to hold much if any grain most years into the July to September period.
