Local buyers, such as grain elevators or feed yards, set the current cash price for grain in that area’s market. Ask for ideas anytime. She might worry that when it comes time to sell her crop, there will be a surplus that leads to a price drop. 1. With a very commoditized crop like grain, however, farmers are price takers instead of price makers. April 28, 2014 by Craig Turner. Education Send Emails Highlighting the Benefits of the Feature. Grain marketing and trading happen extensively through futures contracts. Hedge traders use these contracts to mitigate their risk in the market. Total Farm Marketing and TFM refer to Stewart-Peterson Group Inc., Stewart-Peterson Inc., and SP Risk Services LLC. There’s the board price you see for commodities, which is the price you hear on the radio, see in the ‘futures‘ column on a grain buyer’s bid sheet, and is referred to when people say corn was ‘up’ or ‘down’ today. As an example, if nearby September corn is trading at $3.54 and July 2019 at $3.92, this 38¢ differential, in theory, represents costs of holding corn in storage (or close to the cost). We are excited to announce that MetStat and DTN have joined under one organization, one mission and one corporate brand. The cash market is driven by local supply and demand, transportation costs, facility costs, etc. At Commodity Concepts, LLC, we believe that there are 3 critical elements that will lead to grain marketing success. It began when farmers switched from growing a little bit of every grain to producing a lot of one type. The cash market refers to the bids that the grain buyers you deliver to post. The futures market can be used to hedge, but farmers don’t physically deliver futures contracts. The energy downstream fuels the world. Grain elevators typically sit close to railways or highways to make transportation simpler. Let’s use corn as an example. Traders in grain marketing also need to make decisions quickly to hedge their positions and make a profit. It might surprise you how much I received this response when I would tell people I helped farmers market their grain. Rather, a farmer has the flexibility to lock in the price of the commodity before delivery, which is called ‘forward contracting.’ For instance, if I’m planning on planting 500 acres of corn this year and my average yield is 200 bushels per acre, I know that I’ll harvest approximately 100,000 bushels (500 acres * 200 bushels per acre) that I’ll be delivering at harvest. is the lifeblood for grain traders who want to hedge or speculate. When “Grain Marketing is Simple” was released in 2007, Edward Usset broke new ground with a different approach to grain marketing. The corn or soybeans they are producing are not differentiated from the farmer next door. From weather forecasts to real-time ticker data, DTN products help you run your business. Understanding ‘carry’ in grain marketing. Farmers need accurate weather forecasts for their crops and historical data that helps them understand weather trends. Storage and Transportation Farmers move their harvested crops to the elevators. • Free supply - The amount of grain available to If her current spot price is $3.50 per bushel, but the futures price is $3.75, she may want to hedge her risk by purchasing a futures contract. So what is grain marketing in today’s world? We purchase a lot of grain on Scale Up Selling through Firm Offers. When a farmer makes a sale or a contract comes due, trucks, trains, or ships move the grain to its destination. Easily track and manage the most important parts of your crop marketing activities. For instance, the price the elevator down the road is paying for your grain on their bid sheet, is the price in the cash market. The market moves and changes swiftly, and technology lets you stay in the loop. Need someone you can relate to when it comes to understanding grain marketing? They want to avoid having grain that ages prematurely or molds, ruining the rest of the crop in storage. “Dominant Market Psychology” – This is a reading of current bullish or bearish bias across a host of … Many grain elevators now offer text messaging with cash price updates. Producers can use the signal to figure out what marketing strategy to follow: Sell or store. Thus, grain marketing refers to the process of selling a commoditized crop that a farmer produces. {Corn & Soybeans}. It’s possible to automate just about everything, from customizing weather forecasts to scheduling contracts. New technology provides desktop and mobile applications that help support quick decision-making. DTN regularly hosts or attends key events, which helps us further strengthen our connection to the people and industries we serve. This will mean that our social media accounts, website and other related marketing activities may undergo a change, as we rebrand ourselves to DTN. Farmers Why we use offers to help execute our marketing plan, Futures Months Cheat Sheet! Feed yards, mills, and ethanol production plants are the typical buyers for grain. • Carryover - The quantity of a commodity re-maining at the end of marketing year. Basis is often called "the voice of the market" because it's an indication of whether or not the market wants your grain. Grain marketing in our modern society is how farmers sell what they grow, and it allows them to sell on a large scale. Customers may include everyone from ranchers who need feed for their livestock to ethanol factories. Your Future . Let’s say it’s June and I like the price that a grain buyer is posting for harvest delivered corn. Many grain buyers offer several contract types that farmers can use. Our goal is to provide the grain handling and marketing alternatives necessary to maximize your profit potential. This post was written based on feedback from followers of Farm Girl Next Door, so if there’s something else you’re itching to know about grain marketing, shoot me over an email at nefarmgirlnextdoor@gmail.com or DM me on Instagram! That’s great, where do you advertise and promote it?”. Merchants paying margin calls in rallying markets, may angrily say: How can this market keep rallying? “So you do marketing for grain! You will gain a sound understanding of basic grain marketing principles and strategies, enabling you to identify marketing opportunities within your grain enterprise that will increase the returns to your production system. Today’s grain traders can streamline and optimize their work with the push of a button. This will mean that our social media accounts, website and other related marketing activities may undergo a change, as we rebrand ourselves to DTN. Grain Marketing Terms Actuals - The physical commodities that are being traded. Thus, grain marketing refers to the process of selling a commoditized crop that a farmer produces. First step, sign up below for a weekly update on the most relevant ag news and what’s happening on our farm Next Door! Producers and agribusinesses face the immense responsibility of feeding the world. As such a critical piece of the economy, grain markets have many different people involved. It is now a fast-paced commodity market and a potentially lucrative career. However, the ending basis at these country points is often predictable and can be used for making marketing decisions. That’s not useful in the ag industry with a commoditized product that does not have differentiating factors. When it comes to developing a strategy there's no one answer that works for everyone. Or, some buyers also offer non traditional contract options that allow grain to be priced in different ways. Instead of simply selling at the cash price that’s posted by a grain buyer, a farmer could use a contract type that just locks in their basis level or futures price, allowing them to set the other portion of the price later to establish their cash price. New technology provides desktop and mobile applications that help support quick decision-making. Continued training from experts in the field helps keep traders up-to-date in their business. 3937. This will mean that our social media accounts, website and other related marketing activities may undergo a change, as we rebrand ourselves to DTN. For example, let’s say a wheat producer is partway through the growing season and recognizes that the weather has been mild, calm, and favorable. AgEdNet.com, a service of Stewart-Peterson Inc.. Stewart-Peterson Inc. is a publishing company and a part of the Total Farm Marketing family of companies. Contact Your ADM Grain Representative. Understanding the Relationship of the Farmer with the Market. To do this, they must have a lot of data at their fingertips. Grain marketing in our modern society is how farmers sell what they grow, and it allows them to sell on a large scale. They check for debris, such as stalks, and examine the grain’s moisture levels, too. DTN supports agricultural producers and commodity traders through a comprehensive suite of solutions. Operators weigh and test the grain before storing it. Email is still the most cost-effective way to … I have some thoughts about using commercial storage…but it is still an option. This service makes it easier for those in the market to know what is happening in a particular location. They directly feed people and livestock around the globe. Single Grain is a full-service digital marketing agency that helps great companies grow their revenues online. As producers sell grain this winter, many are asking for a strategy to retain ownership. We are excited to announce that DTN has acquired. Buyers Seems pretty straightforward and simple, right? Basis is the difference between the cash price paid for your grain and the nearby Chicago Board of Trade futures price. Stewart-Peterson Group Inc. is registered with the Commodity Futures Trading Commission (CFTC) as an introducing broker and is a member of National Futures Association. I’m your Farm Girl Next Door–another girl navigating her way through making decisions on the farm. Clearly, without grain producers, there is no grain market. Grain marketers are not shielded from such an emotion. The program provides inspection and weighing services for both domestic and export markets. I’ll use my agriculture background and work experience to help empower you to make decisions on your farm, especially grain marketing decisions. Ticker Data Marketing grain by using basis contracts provides more flexibility in how farmers can market their grain and profit from their crop. It is April 10th and a farmer in Fargo, ND has corn in the bin and wants to sell. Feed yards, mills, and ethanol production plants are the typical buyers for grain. Marketing terminology 9Contracts • Forward Contract –is a contract for the cash sale of grain at a specified price for future delivery. Courses and classes on fundamentals, basis trading, and more are available online to support those in grain marketing. Grain Marketing Basics, Introduction. 137 South Main Street, West Bend, WI 53095 Thus, marketing in the traditional sense of the word is typically used to promote and differentiate a product from competitors. These legal documents set an amount of grain and price per bushel for delivery at a future date. Farmers have different contract types they can use to sell their crop. By Other News - October 11, 2017. Much has changed in the past eight years, and the 2nd Edition aims to address these changes. Or, some buyers offer commercial storage for a fee. We are excited to announce that WeatherOps and DTN have joined under one organization, one mission and one corporate brand. Once the farmers harvest their crops, they generally store the grain in a grain elevator or on the farm until it’s time to sell. Our leading decision support tools and forecast insights help ensure safe, efficient operations. They may also be on ports for shipping. When the term ‘marketing’ is used outside of the Ag industry, it is almost always used when discussing how to promote a product to buyers. They buy and sell futures contracts without wanting the physical grain at play. Seven grains and grain derivatives trade on the Chicago Board of Trade (CBOT): Corn; Oats; Wheat; Soybeans; Rice; Soybean Meal; Soybean Oil See what we’ve been up to by reading our latest news coverage and press releases. Anyone involved in the modern grain marketing supply chain relies on technology for their success. Enter your ZIP code Grain marketing in a simplified way is a series of decisions starting from price discovery and strategy through sales and execution of the grain. To stay competitive in the grain market, traders rely on access to real-time, accurate data. It all starts with a Market Plan and understanding where your break-even is. Storage provides flexibility and potential opportunities for better prices after harvest. A Grain Marketing Dashboard for FBN members. Thus, marketing in the traditional sense of the word is typically used to promote and differentiate a product from competitors. Iowa State University Extension grain marketing economist Chad Hart discussed the use of basis contracts at a recent grain management and marketing meeting. Request a demo today. The market moves and changes swiftly, and technology lets you stay in the loop. In other words, looking in the rear view mirror means missing the market opportunities ahead. Grain marketing is a difficult and important job that indicates the profitability of your operation. Grain Basis is the difference between the price of a commodity in the local market subtracted from the price of the commodity in the futures market. The cash market is where farmers sell and physically deliver their grain. The year begins at harvest and continues until just before harvest of the fol-lowing year. The futures price minus the current cash price gives the basis, and it can be negative or positive. Grain Marketing - Choose - Grain Market Outlook Newsletter Grain Supply and Demand (WASDE) Interactive Crop Basis Tool Crop Basis Maps Publications Presentations Go Grain Marketing- when a producer sells his/her crop for the aim of generating revenue above the cost of production. Introduction to Grain Marketing Many farmers combat a volatile market and low prices by developing hedging strategies to mitigate risk. Farmers need accurate weather forecasts for their crops and historical data that helps them understand weather trends. Single Grain HQ #3630 Aon Center, 707 Wilshire Boulevard Los Angeles, 90017 (800) 701-0793 contact@singlegrain.com A narrow or improving cash basis is a signal that the market wants your grain. Text Messages Up-to-the-minute exchange data is the lifeblood for grain traders who want to hedge or speculate. Making disciplined grain marketing decisions builds a successful foundation for your farm for years to come. Many grain elevators now offer text messaging with cash price updates. In addition, the weather creates a significant impact on these markets and adds a layer of unpredictability inherent in all trading. The futures market is impacted by global supply and demand, global weather events in relevant commodity producing areas, economic factors, etc. There’s a futures market and a cash market. Clearly, without grain producers, there is no grain market. Below, I’ve listed a few of them. type crop. • Hedge to Arrive –Is a contract for the cash sale of grain which locks in the futures price at the date of contracting, the basis … At Ludlow Cooperative Elevator Company we are in business to serve you. Grain Contracts & Programs Grain Marketing Alternatives. The core of the paper discusses the decision making process around grain marketing by discussing some of the common mistakes made in this area and introducing some concepts to improve this process and begin the journey of improvement for a farm business and its managers. The Basics of Grain Basis Trading. A grain futures contract is a legally binding agreement for the delivery of grain in the future at an agreed-upon price. A farmer doesn’t have to sell the crop at the same time that it’s harvested. DTN supports agricultural producers and commodity traders through a comprehensive suite of solutions. From weather forecasts to real-time ticker data, DTN products help you run your business. You’re right where you need to be. We also invite media inquiries and requests for industry experts. While this is a very high level overview of what grain marketing is, I’ll use future posts to help dive in and explain each of these items in more detail! Farmers who consistently use ProPricing year after year typically recognize more value than those who vary the amount of bushels enrolled based upon the previous year’s results. Grain commodities are some of the most essential on the market. They also must remain alert to weather trends and events. They may also be on ports for shipping. Our trusted solutions and actionable insights help them boost yields, minimize risks, and protect their bottom lines. Continued training from experts in the field helps keep traders up-to-date in their business. Farmers move their harvested crops to the elevators. From early crop-year planning, ‘til your money’s in the bank, we pledge to be the best grain marketing strategists you can find. This can get complex fast, so I’ll keep it simple. 2. Total Grain Marketing (TGM) is a full service grain company that offers various grain marketing options to our customers and can meet the grain demands of both our producers and consumers. Bids from More Buyers FBN Profit Center ends the annoyance of having to check multiple websites or make multiple phone calls in order to collect the bids in your market. The trading industry plays a critical role in the world economy. These trends support the farmers as they decide when to sell. She would lock in the higher price, protecting her revenue in case prices start dropping by harvest and delivery time. Well, there are actually several complexities. the marketing system or to a given grain 3 Futures and cash prices normally are not equal at non-delivery points or at country markets due to transportation costs. But futures prices tend to be different from the cash prices. Whether you are a farmer or a trader, DTN offers a. Quality is certified according to the official U.S. standards for specific grains. We’ll review some strategies in this perspective and focus on a conservative strategy that has merit when comparing it with the cost of storage and also reduces market risk. This paper firstly outlines several key underlying concepts that once understood can take good grain marketing to ‘best practice’ grain marketing and help to reduce some of the confusion surrounding grain selling. Unless, of course, they’re doing a non GMO, organic, etc. We are excited to announce that Frontier Weather and DTN have joined under one organization, one mission and one corporate brand. What did the first group of Cash Grain Marketing 101 students think of the course? Cash Grain Marketing 101 | An Online Course, This might as well be written in Spanish…. Grain marketing is an ancient trade, dating back to 9000 BCE. Farmers have the ability to wait and sell grain after harvest if they have on farm storage. Seven grains and grain derivatives trade on the Chicago Board of Trade (CBOT): Soybean oil is a unique grain product because it is also essential to the biodiesel industry. In short, there are many moving pieces that demand their attention. Grain elevators typically sit close to railways or highways to make transportation simpler. Finally, a fra… Farmers use a combination of knowledge, experience, and technology to produce as much as they can. Grain Marketing ADM offers a wide range of forward market and cash-based grain contracts to fit your marketing plan. A firm offer is a commitment of bushels for a specified delivery with a specified price. Connect with a DTN team member today to see how DTN can serve you. Some of the critical pieces that grain traders need are: Technology plays a significant and growing role in grain marketing. Grain Services is a grading and inspection program in the Division of Commodity Services. Weather  The corn futures market is currently trading with a carry, which implies the market is encouraging producers to store rather than sell. Once I deliver it, I’ll be paid the price I established on the contract in June. Grain marketing systems. Once the farmers harvest their crops, they generally store the grain in a grain elevator or on the farm until it’s time to sell. This strategy is … We give traders a competitive edge with the latest and best information, plus tools to enhance their analysis and support faster trades. That’s not useful in the ag industry with a commoditized product that does not have differentiating factors. Traders utilize technology in many ways to stay profitable. This service makes it easier for those in the market to know what is happening in a particular location. We support its suppliers, wholesalers, and buyers with unique tools and insights to help manage tightening margins and growing volatility. Most marketing decisions are based on the emotional elements of fear and greed, yet the best way to develop a successful marketing solution is to remove the “emotional” element. Whether you are a farmer or a trader, DTN offers a range of products to meet your needs. Customers may include everyone from ranchers who need feed for their livestock to ethanol factories. In that case, I could choose to contract and lock in the price on a portion of my grain today, even though I won’t deliver it until harvest. Farmers use a combination of knowledge, experience, and technology to. Without technology, people are left behind quickly. These trends support the farmers as they decide when to sell. To assess the benefit of post-harvest improvements for small and medium farmers we need to know the interrelationship between these farmers and the marketing system. example, the marketing year for the current corn crop is from Sept. 1 of the current year to Aug. 31 of the next year. on fundamentals, basis trading, and more are available online to support those in grain marketing. The difference between the two amounts is the basis. Grain markets follow supply and demand closely, with a somewhat predictable cycle for each type of grain. I’m also a total foodie and enjoy sharing meals with the people I love, so I’ll sprinkle in healthy recipes that are a hit in my household for you to try in your own kitchen! However, speculators have little interest in the actual commodity and are accepting risk in the hope of making significant financial gains. Worldwide, weather poses serious threats and challenges for a number of industries. Arbitrage - The simultaneous purchase of commodities in one market and the …
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