Revenue Management

This week:  Selling in a weather-scare market

This week, corn prices rallied sharply upon the wet weather forecast and planting delay concerns. This is giving us the chance to make more cash sales and to get some new crop 2019 sales, and possibly 2020 hedges in place. Here are five suggestions on how to handle this increased market volatility…

  1. Make a series of 10% hedges. This allows you to average up if the rally continues.
  2. Use our price targets to have offers in above the market.
  3. Use all of the marketing tools. Initially, we are placing hedges. If the rally continues, we will also recommend buying puts.
  4. If you are in an area with planting delays, you still need to manage risk. You may want to use more puts instead of hedges or hedge-to-arrive contracts.
  5. Stay aware of prices for the 2020 crop. Have offers in to sell some if futures get up to an acceptable price level.