Using storage and risk management to get $5.90 corn

By Jon Scheve, Superior Feed Ingredients, LLC 

Delays in planting across parts of the Corn Belt sparked a rally in corn last week. If a large portion of the crop isn’t planted over the next two weeks, futures could continue to rise. However, if there seems to be enough opportunity for farmers to make significant progress in planting, then the market will likely pull back.

Setting corn basis on the 2023 crop

I have 100% storage capacity for all my crop production on my farm. This helps with harvest logistics and allows me to maximize profitability from more basis opportunities and market carry.

Within 60 miles from my farm, there are two ethanol plants, six feed mills, and four rail shuttle loaders. Since I never know which location will have the best bid each year after harvest, HTA (Hedge To Arrive) contracts are never a profitable option. Usually, I can even get a premium to what my local markets are bidding, if I sell my corn picked up on the farm and let someone else haul it away, which can sometimes be up to 500 miles.… Continue reading