1. “Transitioning Expectations”
South Dakota Corn Growers
30th Annual Meeting
January 9, 2016
Brian Splitt
Allendale Inc.
“Transitioning Expectations”
Ongoing Demand Concerns
Finalizing 2015 Production
Marketing Efficiency Tips

22. Two simple actions to consider for sound marketing:
Effectively capture carry on bushels going in the bin
Ensure that your method of owning grain is in the most
efficient way possible

34. Takeaways from analyzing ten years of carry:
4 of past 10 years, max carry was achieved before July 4th
Carry achieved prior to July 4th was, on average, only 3.25 cents away from max carry for the year
Removing 2008 due to the economic collapse skewing values, the average would be 2 cents
Carry achieved prior to July 4th was, on average, cents better than the tightest carry during fall
Removing 2012 due to the drought skewing values, the average would be 9.25 cents
During 2012 drought, saving 40 of the 58.5 cent rally in the spread would equate to $200,000 for a 500k bu producer
In 2015, complacency in rolling futures or HTA sales may have reduced a potential value by as much as 19 cents
Effectively managing carry could be the difference between being in the black or being in the red for the year

35. CASE STUDY
Producer in Codington County calls end of November for advice
He has 2/3 of his 120,000 bushel corn crop sold HTA in his bin
1/3 of his corn crop is unpriced in commercial storage
Storage fees begin December 1st at 5 cents/month
He is concerned basis will not improve
Intention is to price commercially stored bushels late February / early March
He is hoping prices rally after the January report
He is margin call adverse and should not use futures

36. What are his options?
Leave grain unhedged and pay 15 cents for commercial storage
Buy a put to hedge prices and pay 15 cents for commercial storage
Sell cash and accept market value
Sell cash and buy a call for paper ownership

37. South Dakota Corn Growers
30th Annual Meeting
January 9, 2016
Brian Splitt
Allendale Inc.