Soybean Seasonal Price Up Trend Ends July 15
How to Decide When to Price Grain and Oilseeds
The age-old problem is to decide when to price your grain. That task should be a two-stage process; basis and futures determine the cash price.
The easy stage is the basis, which is very predictable and the annual range is relatively small compared to the futures price.
The difficult stage is pricing (locking-in) the future price, which is very volatile and some years, very unpredictable. The decision of when and at what price to lock-in futures, whether as a HTA, forward contract or hedge position in one’s own futures account, requires the same decisiveness and sometimes, nerves of steel.
When in doubt, you cannot chicken out on the decision. It is OK to not price futures, but the decision to not price futures should be an intentional decision rather than a non-decision to wait another day.
This is a decision-making tool we highly recommend when the decision is difficult: