Target Orders: A Valuable Tool in Grain Marketing
Dec 01, 2023
By Nathan Flores, Associate Grain Originator
When selling grain, putting in an offer and using target orders to secure a predetermined price above the current market rate, whether for stored bushels or future delivery, allows for locking in a specific price without waiting for the market to meet a particular level. It's crucial to understand that target orders necessitate active management and are not a "set-it-and-forget-it" strategy. Nevertheless, they can be a valuable asset in any grain marketing plan. Here are some clear tips to consider when employing target orders:
- Participate in Overnight Market Movements: Take advantage of overnight market movements as the day session ends.
- Capitalize on Volatility: Seize the potential to price grain at desired levels, especially in volatile and fast-moving market conditions.
- Implement Target Pricing and Goal Setting: Actively put target pricing and goal-setting into action.
- Ensure Accountability: Use target orders as a means of accountability to market bushels at prices aligned with your marketing plan.
It's crucial to acknowledge that target orders come with specific requirements and risks, akin to any other marketing strategy. They do not equate to the direct purchase or sale of grain and are not guaranteed to be fulfilled due to market conditions. Sellers retain the option to cancel target orders or set an expiration date. It's also important to note that basis and futures risks persist until a contract is finalized. Integrating target orders into your marketing portfolio can be an excellent asset.
Should you have any questions, feel free to reach out to a member of our knowledgeable GCC Grain Originator team.