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The Value of Target Orders

Nov 05, 2021

By Cindy Warner, Grain Originator

Target orders. No, no, not the kind when you (or your significant other) grab that cup of Starbucks and click “add to cart”. Those are not the kind of orders we are talking about. We are talking about having a target pricing level for your grain and putting it into action. Simply put, an offer.

How many times have you told yourself, “If corn hits 4.00, I am going to lock that price in.”? Exactly, lots. With target orders, you can offer a certain number of bushels of grain, either in store or yet to be delivered, at a certain price above the current market. While target orders aren’t a set-it-and-forget-it strategy (no grain marketing strategy is), target orders do hold value in your marketing portfolio. Some of the values to target orders are:
  • Ability to participate in overnight market movement
  • Potential to price grain at desired levels in volatile, fast moving market conditions
  • Ability to put target pricing and goal setting into action
  • Means of accountability to market bushels at prices according to a marketing plan
Pretty sweet right? We thought so too.

Keep in mind there are some stipulations and risks to target orders, like any marketing strategy. Target orders do not constitute the sale or purchase of grain and the target order is not a guarantee as market conditions could prevent a fill. The seller may cancel the target order at anytime prior to a fill being made, or the seller can set an expiration date upon the offer being made. It is also important to remember that the seller will still hold basis and futures risk until a contract is made.

Target orders, no longer for online shopping but a tool in your marketing portfolio!
 


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