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Hennepin, IL | First piece of advice, keep it simple and don't get out over your skis. One bit of info to keep in the back of your mind, especially when you hear guys talk about doing these complicated trades, is that in the long term it's been tough to beat selling a small % of your crop every trading day or a slightly larger percentage once per week.
Where I'd (and did) start is knowing your COP and therefore what you need to sell for to at the very least cover your costs. Know that the market doesn't really care what your COP is, however if you know what it is, you can make an informed decision from there. I've found it makes sales easier when I can put a number to it, positive or negative.
Next step, just focus on forward or cash sales to start. Figure out where you're comfortable being sold and when. Get those mechanics down and develop a plan. For example, I've liked to be 1/3 sold by mid summer, another 1/3 around harvest through Dec, the last 1/3 the end of the year through Mar 1.
From there, learn the mechanics of separating futures price and cash price/basis and the different tools out there to do that. I'd lean towards using a combination of HTA's, basis contracts, and cash sales, that way you're not on the hook for margin money like you would selling straight futures. Once you understand how all that works and understand margin requirements, you can look at selling futures to save a few bucks on fees.
Once you have the above all down, only then would I start looking at options. Keep it simple and only buy at first, that way you're only out the purchase price.
For all the above, I've found the easiest way to learn is to do, just one step at a time. Get the first step down, dip your toe into the next. It's not rocket science, but learning bit by bit and not confusing or overwhelming yourself with the many different tools out there is the trick.
Edit: The last thing to know about NAT is there are marketers and traders both on here. A good marketer is not necessarily a good trader and a good trader is not necessarily a good marketer. If you want to learn to be better at marketing your crop and adding to your bottom line, listen to the marketers. If you're wanting to know what people think the market is going to do, listen to the traders, but also know that you need to know the timeline they're talking for context. Example, trader A says we're going higher, B says we're going lower. A is talking today, B is talking this month. They could both be right but look wrong without context.
Edited by AVP_Matt 8/16/2023 12:12
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Best Advice you have for Novice Farmers/Markerters
