Preparing for Price Volatility. Corn increases as there is still uncertainty about near-term weather patterns. According to Advance Trading Inc. (ATI), an effective risk management plan will only execute in this environment if a plan is mapped out well in advance. The company provides a recent analysis of the market and how this can create a challenge for producers without a plan in place:
- December 2017 corn futures fell sharply to $3.74 on June 23 (its lowest price since September 30) and have since climbed back above $4.00.
- Strength in corn comes as surprise with reports by the USDA Gran Stocks indicating inventories were 100 million bushels above the average trade estimate as of June 1.
- November 2017 soybean futures have experienced an even stronger recovery, sliding to $9.07 on June 23 (the lowest price since Aug. 2) before rebounding to trade above $10.00 this week.
- Soybean plantings of 89.5 million were below the average trade estimate of 89.9.
- Forecasters are suggesting a warmer and drier pattern may soon affect more of the Midwest just as the critical pollination period for corn gains momentum.
- Widespread rainfall projected for Midwest growing areas over the next week helped fuel selling interest.
- A slight shift in the weather could result in a several bushel swing in the national average yield of corn and soybeans.
ATI further explains with the market continuing to shift, this type of price volatility could make it very challenging for producers to succeed without a risk management plan in place. The solution? Every decision should be made before marketing volatility takes place and put in place efforts to create a risk management plan.
Having a trusted partner and resource can help implement your strategy for your operation. Be sure to stay in touch with your Big River manager or merchandiser as this market year unfolds.
Harvest Preparation. Big River continues to provide producers with reliable services they depend on to succeed. Senior VP of Operations Steve Henderson states, “This starts with our intensive preventative maintenance program at all facilities with actions such as turning or replacing spouting, reworking transitions and improving safety.”
In addition, Henderson mentions Big River uses thermal imaging to diagnose issues in advance and enhance the quality and safety of the environment. This ensures delivering efficient operations and services for growers.
To learn more about the preventative maintenance program, Big River and what we can do for you, visit our website and locations: http://bigriverriceandgrain.com.
* PRICE VOLATILITY SOURCE: ADVANCE TRADING INC., July 2017 www.advance-trading.com.