Angie Setzer, also known as the “Goddess of Grain” on Twitter, spoke to over 1500 people logged in to the First Farmers Bank & Trust Virtual Ag Summit on Tuesday to discuss grain marketing in this bull market.
She says it ultimately comes down to you having a plan.
“You need to have a general idea of costs, bushels likely to be produced, or at the very least an acreage breakdown. We need to know what needs to move when, and the percentage contracted at all times or have a good idea of that. You want to know your point of profitability and have a general idea of what your pricing targets are.”
Setzer says having that plan will take some of the emotion out of your grain marketing decisions. She adds that scale selling is the best method.
“You’re never going to hit the high of the market with anything but luck. Anyone that you know that has hit the high of the market more than once, it’s not because of skill. It’s simply luck. Now, I’d rather have luck than skill, so it doesn’t hurt to shoot for that, but the reality is scale selling is what really works to kind of trade through a bull market.”
Setzer urges growers to start with a small percentage of crop at the point of profitability and continue selling as the market moves higher.
“Obviously, you can’t just start with 25 percent of your crop in $0.10 increments and then get to the end to be like, ‘Oh, cool. I missed out on the last $0.60 of the corn rally because I sold in the first $0.40.’ You need to make sure that they’re spread out and that the increments are small in this current market structure. I like 5 to 10 percent of expected production. About 10 percent is nice. You know, $0.15 to $0.20 corn spreads on corn where you’re starting maybe at $4.40 with the next target order in at $4.45 or something of that nature. In soybeans, $0.25 to $0.50, so if you’re starting at $12 your next sale target is $12.50 or something like that.”
Setzer says you want to have those targets in place, but you want to make sure you adjust them if the information or outlook begins to change. It all comes down to having that plan.