I often resist blogging about current markets and more on general practices, and sound marketing principles. I have been receiving lots of questions from producers about beans, and rightfully so! The questions I hear: Should I sell or should I wait? Is the bean market topped out?
I would like to talk about what is going on in the bean market and how to balance the dilemma of to sell or not to sell. We are hearing some marketing folks say, “we are going to $13!” while others say, “the rally can’t last!” The reality is even the best marketers don’t actually know what the future holds. No matter what decision a producer makes, he sets himself up to either say “I should have sold more…” or “I should have waited.”
So here goes! January beans have consistently worked themselves higher since mid-September. The market legged up late November giving us a nice bounce and opportunity to market some beans. A short time after the run-up, the market took a breather and went back down to the $10.20 area finding support and bouncing back up. Often, the new support is the old resistance line. Noting beans had trouble breaking the 10.20 mark back in August and in early November.
So to answer all of the above questions.
Should I sell or should I wait? Seeing that we are trading back to levels we have not seen since July…yes, you should sell some beans. My practical advice is to take profits when profits are there to be taken. In the event the market does take a turn to the downside, having a sale would be smart. Not selling anything at all could prove a disaster. Taking note, I mention just selling a portion of your beans.
Has the bean market topped out? The bean markets appear to be trending upward so having some bullets in the gun, so to speak, is not a bad idea. Will beans go back to fill the gap circled in red? I am not that optimistic, in fact, I think South American production and planting intention moving forward might be burdensome. All of this just my two cents based on what I know today. Moral of the story, we only know what we know, and selling a profitable rally is good for business.