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Four Ways to “News-Proof” Your Grain Marketing

With trade and other issues unsettled, be decisive with your planning.
By ADM Grain Marketing
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One big question in 2019 is trade:  Will the U.S. and China reach an agreement? Will Congress approve the pact with Canada and Mexico?

While export markets are important, there are other market drivers to consider: South American weather, African swine fever, and U.S. corn-soybean acreage swings, to name just a few. Because so much is uncertain, your grain marketing plan has to be more certain. You need a “news-proof” marketing plan.

In our recent podcast, In the Driver’s Seat: News-Proof Your Grain Marketing, we hear from a trade analyst about negotiations. But we also talk with Doug Roose, V.P. of Producer Marketing for ADM Grain in North America, about being less reliant on news cycles:

 

 

Here’s a summary of the trade picture:

Issues with China run deep. Despite recent progress, a full resolution may take longer than most people hope. While the president prefers quick action, China is a big exception. Issues like intellectual property protection and forced technology transfers could take time to completely settle.

We need the pact with our North American neighbors: Congress needs to ratify the new U.S. Mexico and Canada Agreement (USMCA). Legislators may first recommend some amendments. The deal is a net positive for ag—as the old NAFTA was.

Free trade hangs in the balance: Trump said he would shake up trade. Agree with him or not, that’s what he’s doing. Talks with the EU and Japan are pending, as well. Until these trade discussions come to an end, we don’t know if “free trade” will remain free.

So in a year when news events will be driving markets, how can you put some stable grain marketing under your feet? Here’s what Doug Roose recommends:

  1. Plan around your break-even. You shouldn’t go to market without price targets. It’s easy to calculate those on a platform called GrainBridge—and then see how your marketing decisions impact your profitability. It’s free and available at GrainBridge.com.
  2. Market early. Historically some of the best times are now through April or May. Use automatic grain contracts designed to capture this period—before you get busy in the field.
  3. Use offers. Offers are an easy button. Let us know your target price and we’ll alert you when it hits, using the ADM Offer Management app. Download it at the App Store or Google Play.
  4. Get assistance. Share your marketing goals with your ADM representative. We’re here for you, our time is free, and we have a variety of tools to help you achieve your price targets.

Let’s keep our fingers crossed about ongoing trade talks. But remember, there’s no one silver bullet. Prepare to capture many market opportunities throughout the year.

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ADM is providing this communication for informational purposes, and it is not a solicitation or offer to purchase or sell commodities. The recommendations in this communication do not take into account any particular individual’s or company’s objectives or needs, which should be considered before engaging in any commodity transactions based on these recommendations. The sources for the information and recommendations in this communication are believed to be reliable, but ADM does not warrant or guarantee the accuracy of the information or recommendations. ADM or its affiliates may hold or take positions for their own accounts that are different from the positions recommended in this communication. The information and recommendations in this communication are subject to change without notice.