What is enough? In 2012 when corn prices were above $7.00 for much of the season, you should have covered your cost of production and tucked a little away for capital improvements. Many of you sold well below $7.00 long before the December futures contract topped out at $8.40 on my chart. While you can justify the sales as a good decision because they covered cost of production, can you justify leaving $300-$500 per acre on the table? What difference would an additional $200,000 of revenue make for a 500 acre operation. Or does more than half a million dollars for a 1,500 acre operation make a difference?
As you evaluate the opportunity you gave up, it is not the $8.40 top that defines the potential so that selling in the $6.50 range (for example) got you close to the top 50% of the range, based on a $5.02 low. The potential was there for a net realize a price above $10.00. Now your $6.50 doesn’t even get you out of the bottom third of the range. More significantly, it means you failed to lock down roughly $3,50 per bushel of additional potential. With 180-200 bushel yields, that is a million dollars for every 1,600 acres. Can you afford to leave that kind of money on the table?
One of the simplest and easiest understood technical indicators, a moving average crossover, would have facilitated important timing for selective hedging decisions and opened the door to the possibility of marketing your corn above $10,00. If you are interested in networking with others to learn how to execute your marketing plan more effectively, contact us and register on our bulletin board.