Perspective is important, and ISU Extension Farm Business Management Specialist Steve Johnson swung in to offer some thinks to think about. It's a structure involving price objectives in marketing old crop bushels? Steve says he's been using Fibonacci retracements all fall and winter. It’s simply 38.2% or 50% retracements from the May highs to the Sept. lows.
Jan. soybeans = $9.17 (38.2%)
July soybeans = $9.55 (50%)
March corn = $3.86 (38.2%)
July corn = $4.06 (50%)
Note we’ve already hit both of those levels in soybeans and spent the last 3 weeks with heavy resistance around $3.86/bu. for March corn futures.
It's time, Steve says, to encourage farmers to make some cash sales, especially as basis tends to strengthen at processors the last half of December.
Most of these processors will need 4 days of grind to get through the Christmas and New Year’s long weekends! He also points out that according to his case studies' break-even costs suggest selling now could result in a 20 percent return on investment, which would be higher than typical in this business. Things to think about for sure, and we appreciate Steve's insight.