1. DEVELOPING A MARKETING PLAN

2. What is the basic information you need to develop a marketing plan? l Determine the amounts of grain to sell l Determine the marketing tools you want to use l Determine when to sell l Form a realistic price goal

3. When should I Sell? l We have two years to sell a crop. Expand your window Spread your risk Sell in smaller increments l Recently best prices have occurred in fall prior to planting.

4. l Storage Season manage inventory--basis maximize returns to storage l Planning Season winter months l Selling Season Months of Mar. Apr. May and June SELLING SEASONS ACCORDING TO ROACH

5. Corn Prices--Normal Seasonal Pattern

6. Soybean Normal Seasonal Pattern

7. l Pre-Plant Recommended 10 to 20% of Crop l Growing Recommended 10 to 20% of Crop summer weather market l Harvest Recommended 10 to 20% of Crop l Storage SELLING SEASONS BY COUNTRY HEDGING

8. Deadlines l March 31 for pre-plant season Planting intentions report l June 30 for growing season Crop size generally known l Same dates apply for stored crop--all sold by June 30 l YOU MUST SELL BY YOUR DEADLINE

9. December Corn Seasonal

10. December 1998 Corn chart Planting Intentions Report Crop Estimate Report

11. November Soybean Seasonal

12. November Soybean Chart Planting Intentions Report Crop Estimate Report

13. What tools do I use? l Cash Sales l Forward Cash Contracts l Basis Fixing Contracts l Hedge-to-Arrive l Minimum Price Contracts Elevator or grain merchant

14. What tools do I use? l Sell Futures Contracts l Buy Put Options Fence l Buy Futures Contracts l Buy Call Options Sell and buy a call l Combinations with Cash Futures and Options

15. How well equipped is your tool box? l The more tools available the easier it is to meet your marketing goals l The added tools give you added flexibility l Learn about the tools and how they work

16. Picking the Proper Marketing Tool

17. Basis your market indicator l Know what the normal basis is Know the seasonal patterns l Tells us what tools to use l Tells us if it will be profitable to store l Can be used to time sales l Used to indicate market conditions

18. CORN BASIS

19. SOYBEAN BASIS

20. REALISTIC PRICE GOALS l Start with your cost of production plus a profit l Look to USDA projections l Look at Carry Over numbers and % of annual needs l Look at retracements l look at market newsletter projections for various crop sizes

21. USDA Price Outlook USDA Price outlook

22. Carry Over as % of Usage for Corn

23. Carry Over as % of Usage for Soybeans

24. Supply Estimates

25. Retracements Difference between high and low =$0.941 1/3 Retracement (.941 / 3) +$1.854)= 1/2 Retracement (.941 /2) + $1.854)= 2/3 Retracement (.941 /3) X 2) +$1.854)= $2.17 $2.32 $2.48

26. Your Home Work l Think about how much crop you want to sell in each marketing season l Figure out what marketing tools you like to use l Read market newsletters and other information--Price outlook l Be ready to write your marketing plan during the next class session