With numerous global variables still affecting commodity market prices, putting on blinders and bringing the focus down to individual operations may be the wisest way to navigate the uncertainty.
Grain markets are still under the influence of several major unknowns including the Russia-Ukraine war, how much grain China will actually export, and Taiwan strait tensions, not to mention the actual weather and it’s impact on yields.
As some of these factors develop, while others stay at a stand still, Angie Setzer with Consus says farmers should look at their own operation to gain perspective on their margins and make marketing decisions based on those variables, as opposed to tempting the market to see how high prices could go.
“We’re far enough into the growing season that within a certain level, you know, where that [crop yield] could fall. And so utilizing some of those numbers, and just trying to make sure that you’re aware of what your cost structure looks like and get a feel for where you’re at from an overall margin, versus price per bushel, I think, has really helped to kind of remove some of the emotionality of trying to market in this market structure,” shares Setzer.
Narrowing the focus in this way allows for a shift in perspective, she says. Instead of trying to catch the highest price in a market where it could fall just as quickly as it could rise, producers can make a profitable decision based on their bottom line. Looking at even some of the lowest prices we’ve seen this year, they are still higher than we’ve seen year-over-year on average. Looking at marketing through that psychological lens provides a lot more clarity and optimism when locking in prices, as opposed to being uncertain and fearful.
Setzer goes into detail as to what factors are in play, specifically when it comes to China’s exports, with RealAg Radio’s Shaun Haney, in the full interview below.