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Trying to market in an unmarketable market?
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Pofarmer
Posted 1/5/2026 08:22 (#11497723 - in reply to #11497634)
Subject: RE: Trying to market in an unmarketable market?



Ok. So I'm gonna preface this by saying that John Burns is a smart guy. I graduated in 1992 from MU with a minor in Ag economics that was really heavy on Statistics and Marketing. What it taught me, even then, is that you can't outguess markets. One of my professors was in his 80's and had written the book that he was teaching from that was used all over the U.S. It talked about charts, and moves, and options, and all sorts of strategies. And you know what he recommended? Essentially what John Burns recommends. Avoid the seasonal lows and market a percentage each month or week or whatever. It doesn't have to be spot, you can sell it for a certain time period that you want to deliver in. But that should let you avoid the very low lows, and it should let you capture unexpected highs. I think the University of MO still supports this sort of approach. You can't guess exactly what the market will do, so don't try. This takes emotion out of marketing. Oh, and don't buy options trying to "make up" or "protect" a sale. over 80% of options expire worthless, you're likely just throwing more money down a hole. 

Now, with that said, sometimes companies offer "double ups" where they'll pay you a premium and essentially sell an option on your behalf for a future date. But if a certain price point is hit, you'll owe double the bushels at a set price. Look into those. In a generally sideways market they offer some premium and can work. But you'll lose money on a rising market. 

Look at "Minimum Price" contracts. Which is the elevator buying an option for you. You set a floor and stand to gain between now and when the grain is to be delivered. Those can work. Often you can set the price any time during the period before grain is delivered. 

Beware "DP" offers. This is a way to get your grain and you're locked into taking a spot price, and you get locked out of future pricing opportunity on that grain. 

 

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