Grain: Sell Now or Hold?

What a roller coaster of emotion this brought when it comes to marketing grain. I’ve been inundated the question “should I sell or hold my corn or soybeans until next year?” Let's dive into the facts and take the emotions out of this decision.

In the past, did it pay off for us to store grain in supply deficit years? Yes.

Let’s review 2012, 2019, 2020, and 2022, which are the most recent supply short years. In deciding if it would pay off, we can look at each year’s respective price for November and the following May and in each instance it would have paid to store your grain.

The big but of that statement is the abnormal basis that is stretching across this country. Places that typically are .60-.70 under are .30-.60 over in heavy grain producing counties. This changes the decision-making dynamic. Several clients have sold corn for $7.50, or better, and have re-owned it on paper. Why risk $500,000 when you're chasing $50,000 from a possible uptick in the board price? 

With the volatility at play this year, it feels like a basis play, which some argue has already happened. Once river barge traffic and trains are able to efficiently move grain they will flood major corn deficit areas and kill the basis in the short term.

I do believe this will negatively impact the basis.

The level of profitability I am seeing on the financials from my clients is definitely worth trying to get this money directly in the pockets of the producers before some wild event takes 20 percent of market value off the table. 

We are looking at ways to still have market exposure, but only risk a minimal amount of capital. 

Let's face it, we are all eternal optimists and should protect ourselves and our businesses better.