For growers who have stored grain on farm, or are looking at their marketing plans, there are a few factors that AgVantage believes should be considered;
1. What is your quality?
a. If high protein, we suggest selling this quality. The market is currently paying a premium for protein, reflecting the lower protein profile of U.S & Canadian Spring wheat. Once this market is filled, the domestic market will not pay a premium for protein to go down an animals throat.
b. Off grades with protein & screenings – AUH, HPS. We strongly recommend calling us for your options, as more than likely, this will work best in to the packer at a significant premium to the bulk system. Having said this, delivering to the packers does not come without it challenges. We suggest pricing now, & delivering post harvest where possible. If you must deliver now, call us, as there are some better delivery options out there that we can assist you with.
c. Low protein wheat & barley – ASW, AGP, F1. We would suggest considering storing this grain as a drought hedge. That is, if it remains dry, & we don’t get much of a sorghum plant/crop, domestic feed grains will remain supported.
2. What are your cash flow requirements?
a. If you need cash now, sell faba beans, & high quality wheat. Hold canola, lower grades of wheat & barley, hold chickpeas. We suggest that the next opportunity to sell chickpeas will be February/March 2015.
b. If you can defer your income, hold low grade grain on farm until January onwards, as this market is paying a premium to carry the grain of $10/mt or more. Also by this time, the market will have a handle on the sorghum crop. If things improve, your low grade might decline in value, but this will be offset by having a sorghum crop. If it remains dry, your low grades will be supported by the domestic premium to own grain locally.
c. Selling sorghum now, & holding low grades on farm is also another hedge growers can look at. If your sorghum crop yield declines, or does not eventuate, your low grade wheat & barley will increase in value. If the season improves, & your low grades decline in value, this will be offset by having a sorghum crop. You can adjust your position as the season progresses & yield potential & prices become clearer.