Whether your grain marketing plan is basic or elaborate, it’s going to include the cash grain markets, and there are some important tools to help you with the execution.
Even if you’re engaging with advisors and have accounts for puts and calls, these tools can help you make the most of your strategy. We looked at some of the online tools in an earlier blog Using the Right Online Grain Marketing Tools , but here I’m going to talk a bit higher level and really focus in on the cash markets.
Informational tools guide your decision making. They let you know at what price you should pull the trigger. And that isn’t always at the price you expected when you put your marketing plan together. These tools play an important role in keeping you up to speed on the market. But not just any market – the market you’re playing in. It doesn’t help to know what the pricing and terms are for the other side of the country if that’s not where you’re selling your grain.
There are a lot of informational tools out there, including the advisors you work with, mail services, articles in weekly publications, and the information you get from reliable sources in your network. Choose the ones you most trust to provide you with guidance and direction. My word of caution using a baseball analogy: watch out for anyone promising you triples and home runs. Not even the greats hit home runs and triples every time. And besides, as the old saying goes – games are won with singles and doubles.
You might not think of the type of contract you sign as a tool, but they are. Flat priced contracts, basis contracts, futures contracts, puts, calls, averaging contracts, and on and on. You have options and each of them plays a different role in helping you execute your marketing plan. The key is to know the upsides and downsides of a particular contract and what it can do for you.
If you are using more complicated contracts, be sure to have a trusted advisor and not go all in on one or two of them. Stay diversified. I also encourage you to ask your advisor this very telling question: “If this was your money / crop would you do it?” If they aren’t willing to take the risk with their own money, why should you be doing it with yours?
Phone and text deals
Probably the most widely used execution tools today are your phone and text messaging. I know from my days at a large multi-national grain company that a text with an offer and a return confirmation text of agreement is becoming more and more common. Even phone call agreements usually end with a confirmation text before anything is official.
Grain companies are changing. They have more staff, changes in staff, and changes in their business processes. The days of the handshake deals are gone. It’s not that we are less trusting, but rather we’re just more accepting of less formal (but just as official) processes. Just like the disappearance of the barter system that my grandfather used in those early homesteading years; our industry is evolving.
I go into depth about online tools in our other blog Using the Right Online Grain Marketing Tools so I won’t cover them all here. But I will highlight that few of the online tools today can let you choose your deal and close online with immediate confirmation. Just like you would with online banking or paying bills, you use a password and PIN combination to act as your digital signature to complete the deal. These are the online tools you want to look for because they represent the ultimate in flexibility and the next evolution of our grain marketing industry.
CXN360 is an example of this kind of tool – giving you the ability to immediate close a deal with your PIN-Password combination. It’s an online grain trading marketplace that uses a membership model, so you know who is making you offers. The price, terms, and delivery window are all disclosed and if you need to clarify details, you have access to the other party’s contact information. This kind of transparency makes it easier to confirm and close the deal immediate if it’s right for you.
You can receive bid information via text, email, or online to either actively sell your grain, or simply watch pricing in your area. Buyers are visible to you if you want to send them targets for your grain – without risking over contracting.
CXN360 where business happens!