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Why Time-Stamp Your Grain Marketing?

By ADM Grain Marketing
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When it comes to spreading risk and planning for profit, the calendar is your friend. Timing your grain marketing — that is, selling portions of your crop at intervals throughout the year — is not only a good way to spread risk; it also helps remove some of the emotions around marketing.

“A time-stamped marketing plan gives you the discipline of a written plan, yet allows flexibility to act according to market conditions,” says Jordan Surber, ADM Grain Origination Specialist in Indiana.

“Time-stamping increases your chance of hitting the market when it’s near its seasonal high, and eliminates the risk of selling your entire crop when the market is at its low.”

— Jordan Surber, ADM Grain Origination Specialist, Indiana

Here are four principles from Surber on forward-selling your crop:

  1. Make a plan: “Emotions are the biggest challenge farmers face in marketing,” Surber says. “Put your plan in writing and share it with someone else. It will help you understand not only what you’re doing, but why.”
  2. Know your target: Have your breakeven top of mind. “If you’re not sure which way the market will go but you know you’re making money, go ahead and lock in some profit,” says Surber.
  3. Anticipate cash needs: Your marketing plan should be timed for cash flow and ensure that your need to pay bills doesn’t force a sale when the market may not be optimal.
  4. Spread risk: Use different methods for selling, including futures and basis contracts, offers, and cash sales to further reduce your risk. Like a mutual fund, a diverse portfolio can keep you from being too heavily invested in any one scenario.
  5. Track your progress: Use a technology platform such as GrainBridge to capture your production costs, establish price targets, and then see how grain marketing decisions impact your profitability picture as you go.

What does a time-stamped marketing plan look like?

Here’s a sample marketing schedule. There’s no one-size-fits all and you make the decisions. See your ADM representative for help putting together a strategy for your operation.

Time frame                                 Amount

Post-harvest – January….10 – 15%

January – Planting…………30%

Planting – Pollination……..40%

Pollination – Harvest……..15 – 20%

Note that targets are listed in percentages, not bushels. That way, variances in yield won’t affect your plan’s overall balance.

“GrainBridge is a good way to plot out various market scenarios ahead of time, giving you the confidence to make a sale when it works for your operation,” notes Surber. Stay tuned for a whole new amazing way of marketing grain from GrainBridge coming very soon.

Think of marketing as capturing a series of price targets on crop increments—“base hits” that total up to “runs” that cover your production costs. Once your breakeven is protected, all remaining transactions can add to your margins.

“Time-stamping increases your chance of hitting the market when it’s near its seasonal high, and eliminates the risk of selling your entire crop when the market is at its low,” says Surber. “The key to farming next year is to be profitable this year.”

Past performance is not indicative of future results.

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.