Happy First Timer - 3/12/2017 17:22

So based on your chart, historically we will have a old crop spring high in April. Do you believe that will pan out this year based on the 108 mmt+ out of Brazil and the potential for 450+ mb carryout this year?

>>>>My theory has been that we will see the spring rally occur and expire earlier than last year as fund money tries to front run the rally. IMO I have heard way too many say they are just gonna wait and sell the June high. Not often does a page from last years book help you this year. So we shall see how that plays out. I would look for a planting rally to fade hard early May if we make good progress. Time will tell.

Also, do you believe the USDA 450 mb number? As several have posted over the last week or so that the usda has used a 400+ number the last few years only to revise it down to 150 to 200 mb by the end of the marketing year.

>>>> I think demand will continue to grow and be underestimated and reduce carryout projections. That trend will continue until it doesn't. I don't spend much time trying predict all those moving parts.

Just out curiosity, in your opinion what percentage of 2017 soybean production do you think has been forward contracted? What is the normal amount forward contracted on any given year? I have a small percentage forward contracted now, but many folks around are saying to contract 75% or as close to aph as you feel comfortable getting. That seems a little strong to me, but then again most people are starting to accept the 90 million planted bean acres as a reality. Obviously without a drought, 90 million planted acres with trend line yields gives us close to another record crop.

>>>> Good questions. IDK on percentage sold. I think higher basis areas have a bigger % on. I would say we are in that camp and have about 1/3 bought but would guess that is high in US.... maybe other merchandisers will weigh in? I think we are seeing some "forward contract fatigue" since the "the death of the bean" story keeps getting rolled out, then rolled over.

I am sure everyone that sells grain would love to have a crystal ball. However looking back over the years I have raised and sold grain, locking in a large amount of forward contracts in january, February, March time frame would not have worked out as well for me as the summer drought scare rallies we have had.

>>>> Guess it depends what you call a summer rally. I always suggest one has a late June time frame for reevaluating targets. Market psychology often changes early July. When you remove the unknowns of acreage, planting conditions, early weather trends et al from the equation, the market usually takes away some risk premium. Is that say the crop can't suffer? No. As a grower you know the biggest yield impact lies ahead, but you also know that scenario seldom plays out. Maybe 1 in 8 or 10? Not a solid plan. Keeping some just in case depends on your risk tolerance and cash flow needs. No one size fits all in marketing.

I have done better long term contacting on those rallies then the winter rallies. Obviously this year may be different, but I am always more comfortable contracting once the crop is in the ground and I can see what it looks like. I know as Sat says, having a market plan thay includes marketing with the hope of a drought is not a market plan. I agree with him if it's your only marketing plan, but we have all seen a significant rally when we do have one. I think it is always a good idea to keep a percentage of your crop available to take advantage of a move higher.