Forward selling grain

lefthooker

One for the grain men/women,

I've been offered €150/t @ 20% for spring barley. Often thought about selling but never did, but this year I'm considering it.
Would you take the offer or hold out? All opinions welcome.

Thanks.

JohnBoy

what's your margin at that price?

if you're getting an Ok return then why not hedge, sell some forward and keep some for the spot market, if the price goes up you wont have made as much money but assuming you're making money @150/t then it's still good. if the price falls then you wont have lost as much money.

nilhg

We sold some wheat and barley forward for next harvest last week, 180 dried at harvest for the barley and 187 in Oct for the wheat, those prices would be a few euro higher this week I think but that's a chance you always take selling anything.

I bought most of my first split of fertiliser last week as well and it works out that it's taking 2.13 tons of forward sold wheat to pay for it, last year that figure was 2.14 tons so at least I'm holding my own with that one.

It's always a good idea I think when you sell forward to lock in some aspect of your costs for the year probably either land rental or fertiliser, at least you are taking some level of the risk out of the equation.

As regards whether to hold out or sell that's your decision to make, to do that you have to inform yourself of whats going on out there in the markets, I check out all of these sites most days, it doesn't make it any easier to decide when to sell but at least you aren't totally dependent on second hand information.

http://nogger-noggersblog.blogspot.com/

http://www.agrimoney.com/

http://www.agritel.fr/ (click on the uk flag for english)

http://www.hgca.com/content.template/16/0/Markets/Markets/Markets%20Home%20Page.mspx

lefthooker

At the price quoted and adding a few euros to last years costs I'd still have a good margin/profit. We look after everything bar the sowing so that keeps costs down. There's such uncertainty at the moment that I'd like to guarantee a price for an amount of it.

I haven't done anything yet, which is a good thing as I was told that a local-ish merchant was offering €160/t today, the same as he was paying for wheat. Another told me that it could still go higher due to the amount of wheat sown, he reckons barley acreage will be back.

nilhg

lefthooker wrote: »

At the price quoted and adding a few euros to last years costs I'd still have a good margin/profit. We look after everything bar the sowing so that keeps costs down. There's such uncertainty at the moment that I'd like to guarantee a price for an amount of it.

I haven't done anything yet, which is a good thing as I was told that a local-ish merchant was offering €160/t today, the same as he was paying for wheat. Another told me that it could still go higher due to the amount of wheat sown, he reckons barley acreage will be back.

Unless it's scarce on the continent/in the UK that will make no difference, if the price looks like making a premium over imported here (actually getting anywhere near it) the brokers/big end users will be booking a few boat loads.

lefthooker

nilhg wrote: »

Unless it's scarce on the continent/in the UK that will make no difference, if the price looks like making a premium over imported here (actually getting anywhere near it) the brokers/big end users will be booking a few boat loads.

True enough, thats why I'm thinking that €160 would be a great price to lock in for at least half of it and then wait and see what happens.