Grain Wrap | Set targets for on-farm grain

If you are holding lower grades on farm, it would be worth setting a target price and if local values reach your target number, start executing some of these sales.

THE beginning of the 2018 calendar year has started similar to most others; scorching temperatures, lack of rain and everybody feeling a bit heavier after the festive season. 

We can draw some parallels to the grain market recently, which is also feeling a bit heavy after the most recent World Supply and Demand Estimates report. 

A couple of things stand out, particularly the US carry out which was very much ahead of analysts’ expectations and the 1.8 million tonnes increase in global production. 

Although these increases are always subjective as carry out is not always very accurate, this played heavily on the market and the March Chicago Board of Trade contract fell by $6 a tonne the following session.

This has put a dent in the start to 2018, in which many may have thought to find some price support into the early part of the “weather market” in the northern hemisphere. 

Although global prices may seem to be floundering, local values have held up well with the heat on the east coast sparking concerns that the summer sorghum crops may have limited yields or fall over all together. 

This would make other feed grains, and lower grade wheats more sought after if the hot and dry weather continues. 

If you are holding lower grades on farm, it would be worth setting a target price and if local values reach your target number, start executing some of these sales. 

If we look forward and planting rain arrives as expected, basis will potentially start to track lower to align with global wheat values. 

This means you could be prepared to sell into a lower market and you’ve incurred significant costs by storing grain for this long. 

Planting rain might not arrive in some places and basis may rally, but I urge everybody to be diligent with their selling targets and if values in your area reach these numbers, sell a percentage.

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