Marketing grain at local elevator

I have 2500 bushel of soybeans stored at my local elevator. I brought them in there the 1st of Oct, was asked if I wanted to sell them for
that days price of $8.11 or if I wanted to store them. They offered 90 days storage for $0.12 per bushel. This was there minimum storage
fee. Me, in my infinite wisdom figured that the price will be at a low now due to it being harvest time and lots of beans coming in. I
decided to store all my beans. I have been watching the bean price ever since and they are pretty much lower than they were at harvest
time. Todays price if sold to them would be $7.96 minus the 12 cents making it $7.84 per bushel. Bummer.

Now, this is my first year of marketing any grain, I have just done hay to this point. I don't exactly need to sell my beans now, but it
would be nice to free up some cash to reinvest in other things, including next years inputs. I would like to hit the market at a high
point, no one knows when that will be, but hitting the harvest time price is really my goal at this point. Beans have been up the last few
days, but they got a ways to go yet to get to the harvest time price plus the 12 cents I paid to store them.

Now with the above items in mind, I have a few questions for you experienced grain marketers.

Does my thought of harvest time prices being low hold any water? Certainly it doesn't this year, but in a typical year do prices tend to
slump around harvest? When is a usual high point in the market? Is there such a thing?

Also, to determine todays price, my elevator takes ADM's current price, minus the basis, then minus $.55 Today, that is just over $1 per
bushel under ADM's price. I could have my beans removed from the local elevator and hauled to any terminal I like, but the elevator will
still charge me the $0.12 storage fee plus an additional 0.10 per bushel load out fee. I haven't priced trucking yet, but the neighbors
tell me it is about $0.25 per bushel to get the beans hauled to the Twin Cities where ADM and other buyers are at. Is this something I
should look into more? Is my elevator treating me fairly here?

I'm just looking for any grain marketing tips or ideas from you seasoned fellers while I get going in this game. I'm having fun, just need
to continue learning!

I am not a big grower so my input should be considered for what it cost. I have found that if you are not a big producer there is not much to be gained by holding your crops at the elevator in hopes of getting a better price. The storage costs will eat away at any future gain in price. Right now it looks like you are spending around $300 per month in storage fees. It is possible that there could be a big jump in the price of beans or not.
If you look at some of the crop marketing site such as the CBT they have grain prices projected into mext spring and that should give you a clue.
Happy farming

I remember reading an article not long after I took over the family farm in 1997 that a survey done for wheat that in 17 out of the 29 years that they had done the research that selling right off the combine was the most profitable. Since we can't grow soybeans here and corn is a pretty minor crop don't know how that philosophy works in the midwest

Your local pricing for storage and out charge seem reasonable to me. Local here is 18 cents for beans till December 1st, then 2c/bu monthly. In out charge is 5c/bu. The big difference I see is you local pricing. I could sell beans today for 8.96, but we do have a nearby processor and river market to support the pricing.

In general bean markets do not do much till the spring. But remember it is an open market so your guess is as good as mine.

Well It is a long subject to explain here. There are several options you have for next year. As this year is pretty much in the can. I would take an up day and let them go, chalk the rest up to experience.
For next year you can do any of these options ( forward contract, hire them hauled to a different location of your choice off the field, or spend for storage at home then move them as you wish). There are other options for next year also,though not sure for the quantity that they would work good for you. There is Basis contracts,hedge to arrive contracts, and then the previous ones mentioned. They all take some management. I guess it will depend on how dedicated you are to it. The current market has broke through resistance and not fell below support so it is still any body's guess.
I have locked in some this week with the movement upward. I still have some left to do something with also.
With all of these contract options remember if you default (not able to deliver) on them you will get penalized for this. Another words if you contract 1,000 bushel and don't have it you will be charged back on the difference. This will be only if the contract price is below the currant cash price. If you are above it they will just let it expire with no penalty.
Now this information is for the Michigan market area and worth just what you paid for it. Your area and grain facilities may have different ideas and options available.
If you wish more information look into marketing workshops for your area during the winter. Or you can bend the ear of your local elevator guy. Both should be willing to help though not reveal any of their secrets.
I can give you nore detailed information if you like call me at 989 413 5684 or at my email though I only check it about once a week or less, unles I am expecting something.

Marketing is most farmers worst subject, so you ask good questions.

I need to learn much, much more, so probably shouldn't hand out advice. I've only been at it a few decades....

Many marketing plans involve selling 10-15% of your crop at set times, market be what it is. Just sell that 10% that day.

A very basic understanding of average market dips and swings applied to that 10% selling over the year will average you above average prices over the whole year. You won't sell the whole crop at the highest price; but anyone trying to do that generally ends up holding grain way too long and gets below average prices!

Soybeans depend on China buying soybeans. The world - USA and South America - produce way way more beans than they can use. And China buys many many many many soybeans. The rest of the entire world buys very few soybeans.

So..... The price you get here in the upper Midwest for soybeans depends on China. Period.

So to play the marketing game you need to watch growing conditions in USA, and Brazil and a tiny bit Argentina. (And watch the politics in South America - their political leaders tend to be broke and wish to tax farmers to death on export fees and inflation which kills their growing intentions.....) That will tell you how many soybeans will be available for sale.

Then you need to look at China, and see how eager they are to buy soybeans. China will play games, they know they are the only real world buyer. They have exported soybeans from their country to crash the market, them the ships turn around and head to another Chineese port and they 'buy' their own beans back. In the mean time they buy cheaper beans from us and Brazil.....

So, this year the USA grew a lot of beans, Brazil did well last season and looks to be growing a lot of beans, and China is in a financial downtrend and might not buy as many beans as they have in the past. The USA dollar seems to be getting stronger, so China has to pay more for our soybeans if they want any.

All together, it looks a little dismal for soybean prices. There is no good news......

We need to wait until February, when weather will be too dry or too wet in Brazil and their crop will look poor; or wait until end of May in the USA and our planting intentions will look poor from good weather for us. (If we have good spring weather we grow more corn - if we have bad spring weather in the USA we grow more beans....) Then maybe beans will climb up a little.

But we are at a bad time for beans, there are enough around the world and looks like everyone is going to plant plenty more and China looks like they are tightening their belt........


Years ago a neighbor had a 1400bu bin they wanted gone, I got it from them for free. Put it on a concrete hog pad I had, so had less than $50 invested in it, filled it with beans that fall.

Beans dropped $1 a bu over winter.

So that 'free' bin cost me over $1500 that year.

Some years it works out, some years you start shoveling for a loss.....

If farming were easy, everyone would do it.

Paul

Welcome to farming. I tried to copy and paste but could not get it to work so I will just tell you. In the 10 year monthly average from 2004-2014 the highest month for beans is June, 2nd highest July then April, August, May, Feb., Dec., Mar., Nov., Oct., Jan. and Sept. So maybe sell them equally in the 3 highest months. (April, June and July) No guarantee they will be enough higher to pay for storage but that is your best chance. Also never sell on a down day. That way you will never hit the lowest price. Always sell on an up day. Then you may hit the highest for the year. Good luck.

Few years back a younger start up farmer here had some grain in a bin. Prices had been slowly going up and her decided to sell and hauled like mad. The other guys in the area were telling him how stupid he was and that he should sit on it. A week later it topped out about 8 cents higher than he sold at and started to drop. 10 cents the first day. All the smart guys were crying after that. Most of them with a lot of experience. It's a gamble. Me? I'd cut my losses and chalk it up as an education. And education can be expensive!

Rick

There isn't a person in the world who can give you accurate advice on how to market your beans. Your storage rate at .12 is pretty good. I have 7000 bushels of bean storage here on the farm which will hold a third of my production. Last year I did some pencil pushing on how long I would have to store the beans in the bins to break even over hauling to town straight from the field in the first part of October. The figures I came up with told me if I sold the beans before the first of February I wasn't gaining anything by storing at home. This was figuring in .16 storage for the first three months in town. You do have expense hauling to the bin, augering the beans in and augering or vacing them back out.

This fall I sold all of the beans out of the field and deferred the check till January. This is the first time I've sold the whole works out of the field and it was kind of scary when I pulled the trigger on them. I sold for $8.37. We have about the highest basis here in Northwest Iowa. If I would have stored them I would have needed something around $8.53 to break even on storage. After Jan 1 I can take the check to the bank and pay off loans. If I stored those beans in town and the price didn't go above $8.53 till March and I held off till then to sell, I would have to add the price of interest on those unpaid loans to the equation. Only time will till if my decision was the right one.

UPDATE: Beans had a good day today, I stopped in at the elevator, they were offering $8.05/bu. I decided to sell 700 bushel.
I still 1800 bushel that I will play the market on a bit longer.

Don't know where you are at but ADM at Decatur, IL is biding over $9 the last 3 days.

If you want a simple marketing plan simular to Scott Burns's potato chip plan, use this. I have said for years, take a large years calendar and put it on the wall. Close your eyes with a dart and throw it at the calendar. Where it hits is the day to sell. If it is on a Saturday or Sunday, you have the option of going back or forward to that trading day.

A friend said he over heard a broker at a meeting once say that half of his clients were short and the other half were long. That way he was right half the time. They take your money without even a kiss.

Last year was my first year at the elevator. It was an education. I only bank the corn I need for the year so I do not have to invest in storage. We run up and get what we need when we need it. Personally, I would not let the fluctuations in price, moisture, etc get under my skin too much. Where you make out in one year you will lose the next. This is one area where I just look to the long term and do the best I can.

don't feel bad ,done the same thing, contract beans for9.50-10.00 then 2,000 on D.P. at .015 per bu per mo went in at 8.61 now paying 8.50, need 8.76 to break even.....just a gamble you take, some years it pays off

What you need to do is starting at this time look at your income tax situation and decide if you need to wait the 26 days to put that income on next years taxes or sell before the year and put on this years taxes. The tax situation is the make or break item here, not the days price. And if you need to put them on this years taxes make sure that you get the check before Dec 31 as if you sell by Dec 31 but check is not issued untill Jan 2 then it automatically goes to next years taxes as you do not anymore have the crop but you also do not have the income from it in this year. If they write the check for Dec 31 but do not mail it untill Jan 2 that is a big grey area and depending on how your tax prepayer has things set up could put it in either year so you would loose all tax insentives to do either way. Plan your taxes fast. Do you need the income on this years taxes or on next years taxes? Think about that. And I have seen the prices go all different ways during my 72 years on this earth. No predicting possible. The only predicting is what year you want the income in and if for this crop you wait till after new years day to sell and then decide to sell next years crop at harvest time you will have 2 years income in one and get hit extra hard on taxes.