Helping Producers With Cash Marketing & Hedging Strategies

As a professional traders for more than 20 years at the CBOT and the KCBOT, I know just how important it is to have the right information and strategy in place when trying to make the most opportune cash sales.

In an effort to better help producers with their cash marketing strategies and risk management techniques, I recently left the exchange and launched Farm Direction.  I now produce a daily e-mail that is jam packed with insightful commentary, helpful tips and detailed strategies you can use to generate better cash sales and risk management strategies.

I am different from the other advisory type services in the fact that I do not own a brokerage firm or work for a crop insurance agency. This allows me to give you my unbiased opinion and thoughts regarding the markets, your particular operation and strategies you may want to consider. Unlike the others my revenue is exclusively based on the monthly and or annual service fee I charge for my newsletter services.

My professional experience and global contacts will prove to be a valuable part of your marketing success.  Several of my clients continue using their current advisors, but choose to bring me on board in order to provide them with an unbiased secondary opinion about the markets true direction. I have helped many clients better understand the true dynamics and global events that now influence the agricultural markets.

Too often farmers are overwhelmed by the complexity and strategies that “fund” managers are using to drive and manipulate the prices of corn, soybeans, wheat, cattle, hogs, etc… I help simplify this process and act as a guide, teaching you you to where to look for common road blocks, pitfalls, and traps in the market. My information will make it much easier for you to time the market and make improve cash sales.

There is certainly no debate that during the the past several years we have seen very volatile price action in the agricultural markets. If we look ahead, industry data and market research shows it is only going to become more volatile as funds increase in size and wealth.

Regardless, if you are a producer, consumer, or speculator you are going to need a professional plan, strategy and a seasoned professional on board to help you navigate the course.

I truly believe we in the beginning stages of a very explosive movement. I feel we have seen just brief glimpses of the extreme price swings that lie ahead. As global demand continues to surge, and more financial interest flocks our direction extreme volatility will soon become the norm.

I truly believe that if producers, investors and traders can properly position themselves to take advantage of these extreme price swings they will have an amazing opportunity during the next few years to capture and lock in very large returns.

I launched Farm Direction to provide you with the news, information and strategies that will help you properly position yourselves in these adverse market conditions and extremely volatile times.

In addition I have developed some fantastic research tools, automated cash marketing programs and in-depth hedging strategies that are helping my clients make more opportune cash sales, more informed hedging decisions and insightful marketing thoughts regarding the short and long term price direction of  Corn, Soybeans, Wheat, Cattle and Hogs.

I hope you enjoy my daily market commentary and find my information both helpful and informative,
Kevin Van Trump
CEO Farm Direction

Look At What Other Producers Are Saying About Us

Through the years I have met many wonderful people, and have developed many long-term friendships. Hopefully along the way I have helped to educate many and provided them with valuable information, insight and strategies to help improve their overall marketing results.

Below is just a small sample of the “Thank-You’s” I have received.

“I love having a guy like Kevin on my team, trying to make sense of these volatile markets. His experience and willingness to share with producers is a definite plus and pleasure to deal with…”
L.D. Wheatley,ON

“I AM A SEMI-RETIRED FARMER FARMING FOR OVER 60 YEARS AND YOUR COLUMN IS ONE OF THE BEST I HAVE EVER READ. I LOOK FORWARD TO READING IT EVERY DAY. JUST KEEP THEM COMING …”
W.F OAK HARBOR OHIO .

“We are fairly new to marketing our crops as we were dairy farmers. We appreciate all the advice and help we receive from Mr. Van Trumps emails. Thank you for providing this service…”
Valley View Farm, Saint Olaf, Iowa

“The best 10 minutes you will spend every day is reading Kevin Van Trump’s Farm Direction daily report
M.A., Milford, IL

“I had been following Kevin off and on for a year or so. Finally took the Free trial subscription. His advice and reccomendations have been so correct it has been a joy. I have never followed advice before that was any better than 50-50. I am a faithful follower now…”
J.N. Corwith, Iowa

“You can take Kevin’s info to the bank…period.”
J.O. Loogootee, IN

“While not a farmer but as a old BOT member and grain trader for over 35 years your letter is very informative and is very complete in covering the news of the day..”
D.E. Portland, OR

“Kevin’s “Farm Direction Report” provides me with a very informative daily buzz on each major ag commodity. Kevin’s special updates are great and proof of his dedication to be the best advisory service ever!”
D.C. Oklahoma

“I have folowed many advisory services, most are not worth the space they take up!! They seem to get caught up in their own bias and cant see the forest for the trees. Kevin Van Trump is the EXCEPTION, his recomendations are concise and gives you the information you need to make effective marketing decisons. He is on top of all events that affect agriculture–if you have tried the rest–you owe it to yourself to go with the best–Kevin Van Trump!”
Eugene Van Winkle

“Muchas gracias por su información. He realizado una opción en el Cbot con sus consejos….”
Daniela Vassolo- Argentina – Tres Arroyos

“I am not a very large farmer–so I did’nt think it made much sense to pay for pricey grain info”–Kevin provides that kind of rock solid advice at an unequaled price; and so much more–including world info, fuel and stock market thought’s. In 5 month’s time Kevin improved my bottom line by many thousand’s Of $$ !!! Keep up the good work ! My favororite e-mail of the day!”
R.C. Arlington, SD.

“I am an avid reader; Kevin daily report is informative and right on. I finally am making good sales with our wheat and have the information to back our decisions.”
S.S. Tulelake, CA.

“I wanted to improve my marketing this year, after selling my corn last year at a price that was one to two dollars below the average for the year. My best move has been to subscribe too Kevin’s Farmdirection market e-mails and news service. He is very informative on what is happening at the board, and around the world. News that I would never know, on my own! His marketing advice has helped me be a better farmer!”
S.R. Maple Park IL

“Kevin’s approach is fundamental, technical, and aggressive towards profit taking. Farmers need to get on board – he’s not just trading to make money, but to help U.S, agriculture survive…”
C.T., Pepin, WI

“We have been farming in eastern Colorado since 1958 and feel like Mr. Van Trump’s newsletter is the most honest, cut thru the B.S.report I have ever come across…”
D.D. Fort Morgan,CO

“Insight and a willingness to share valuable advice is difficult to come by these days. Kevin’s report is truly inspiring…”
Ian Walker, Vancouver, Canada.

“I am really impressed by the amount of information that Mr. Van Trump distributes on all the commodites on a daily basis. Thanks again for all the info…”
R.E. State Center IA

“I have been farming for over 50 years, during that time I have looked at or subscribed to almost every advisor type service out there. Mr. Van Trump’s Farm Direction is hands down the winner…”
T.D. Champaign, IL

“Kevin’s advice and different views of the market has helped me add to my profits. I look forward to getting his e-mail every day to see his thoughts and information that effects the markets. Thanks!!”
T.W. Washburn,IL

“I have never seen anyone provide such great information all in one daily report, I can’t wait to read each new daily e-mail…”
D.S. Big Falls, MN

“I’ve only been reading Mr. Van Trumps comments for a few months now,but he has already added tens of thousands to our bottom line over the advice I was using. We farm about thirteen thousand acres, I don’t have time to read everything I should. Love his Readers Digest style,(short,accurate,to-the-point,no-bull,just the facts ma’am). Look forward to reading every morning…”
Paul Mayclin, Mayclin Farms Partnership Plankinton, SD

“Kevin’s advice and information has as helped me save several thousands of dollars over the years, I am extremely grateful to have found his services…”
T.L. Wayne, NE

“I really look forward to Kevin’s view on the news and events that shape and drive our markets. He includes facts, humor, insider knowledge and a hint of sarcastic wit that reflects his confidence in himself and his ability to deliver a quality product on a daily basis. Keep up the great work…”
Michael Stubbs, Lacrosse Washington

“I am farming in France and I have spent a long time looking for foreign agricultural commodity information. In the end I have found Mr. Van Trump’s newsletter to hands down the “best”… It offers a full range of both U.S. and international farming news, and allows me to make much better marketing decisions…”
Jean Mac Clenihan Chandon Ainay le Château

“Kevin Van Trump and his daily report has really helped me improve my marketing results. He put’s things in an easy to understand format. I have learned so much during the past couple of years, I encourage everyone in the farming industry to subscribe to his information even if you have an advisor you already are working with…”
J.J. Manchester, IA

“Kevin’s’ daily Farm Direction report provides superior global and local economic information. Information that is an invaluable resource when making grain sales decisions…”
B.H. Monticello, IL

“I love reading Kevin Van Trumps daily reports. He covers so many different markets and with great accuracy. He also makes them easy to understand. I can trust Kevin’s advice!”
G.S. Seward, NE

“The best thing i like about Kevin’s report,is that i can understand what he is trying to get across to me, instead of trying to figure out all that marketing mumble jumbo that i get from other services i have tried. Everyday, he puts a lot of information in his one page email, unbelievable…”
M.O. Somewhere in MN.

“Kevin Van Trump and his Farm Direction advisory service are an important part of our marketing decision process. He provides us with the day to day info from at home and abroad that keeps us feeling confident about our ability’s to farm in the new age of agriculture! I look forward to the info everyday!”
J.S. Watford, Ontario Canada

“I enjoy reading Mr. Van Trump’s total coverage. I follow financials, world weather and the grain market. He accurately covers them all plus more. Great advisory service…”
Wayne Halvorson, Chatfield, Mn.

“I just recently started receiving Kevin’s report and I must say that his straight forward and comprehensive approach is a relief to read. As I subscribe to three other reports Kevin’s report is the first one in the the morning I read and I find myself not reading the others as their is no need to…”
J. Schmitz Rosalia, Wa

“I am a very loyal subscriber, I find the Farm Direction daily newsletter covers that day’s market projections, but even more important it covers the long range expectations based on factual data along with information that comes from Kevin keeping his ear to many sources about all the markets and market influences. Excellent newsletter to stay in tune with worldwide markets and equities…”
Charles J. Hendricks, Long time South Dakota owner of Ag land

“I have been working with Kevin for only a short time but already have been really impressed. He gives out very good advice and calls it like he sees it, not like he thinks it should be…”
John Carroll LA

“Kevin Van Trump, has the best knowledge of the market place, that I have been around, and in his Farm Direction letter there is more information than any one else see’s in the market. It is an easey decision maker for me to sell grain or options…”
M. S. Hamburg IA

“Having been involved in international markets around the world, I appreciate the information that Farm Direction brings into perspective every day. This service helps make marketing decisions with solid information not only from a US but also an International perspective. His marketing advice has helped me to capture the last dollars and cents in a very volatile market this year. Kevin Van Trump puts together strategies that limit risk but allow profitability to be captured…”
K.D. Champaign, Illinois

“I can honestly say even though I now receive 5 different Grain marketing daily services I learn much more from Kevin’s morning email than the others combined. Markets are now based on worldwide weather conditions, world wide political and economic conditions. We are long past the days of studying fundamentals and tracking local basis movement. Grain markets are affected by everything from the value of the Euro to Chinese interest rate swings, to did North Korea really fire on South Korea. I think Kevin has as good a handle on what will affect the Commodities markets as anyone I have followed. I am looking forward to a long and profitable relationship…”
Greg Kruger, Ohio Producer

“A while back, I found a very readable article by Kevin Van Trump & was amazed at his wide scope of world information on our grain commodities. He is upfront and direct in his opinions of where the markets are headed… I can’t wait to read his daily writings and comments each morning. On top of his years of experience, I have personally seen the depth, heart, & real concern he has for the farm community. I knew his writings and his wide range of contacts will aid me in selling my stored grain near the top of the market. All my thanks and appreciation go to Mr. Van Trump…”
I remain sincerely, Lizzie a.k.a. Rosalee Mosburg, Stone City Cherokee, KS

“I am new to Kevin Van Trump but in the short time that I have been reading him, I have been impressed. His articles are easy to understand and filled with good information…”
K.B., Crete, NE

“I’m reading Kevin’s info daily, always offer a lot of news and rumors, he is a very good information source, it is hard to hear it by other place or person. Thanks for your work…”
L.P., Buenos Aires- Argentina

“I look forward to reading Van Trump’s daily newsletter each morning. Very informative and thought provoking…”
Paul Reinitz

“I subscribe to many online marketing services. I just stumbled open Kevin’s site and I was amazed at the plethora of information in his daily reports. I can’t wait to read all of his commentary each day. Kevin’s information and insight site by far tops them all. Thanks for the info Kevin…”
Ross Hebert Abbeville LA

“I find Kevin’s newsletters very interesting. Kevin has interesting observations on the entire world situation. Reading his entire newlsetter is time well spent…”
K.D. Wheatland Iowa

“I have been recieving Kevins advice only for a short time. I already feel I could do a better job of marketing our crops and purchasing fuel. I look forward to his daily reports…”
J.F. Melrose MN

“I love reading Kevin Van Trumps daily reports. He covers so many different markets and with great accuracy. He also makes them easy to understand. I can trust Kevin’s advice!”
G.S. Seward, NE

“I have been farming and playing the markets for forty years now. Of the various market reports and advisories that I receive the one that I look forward to the most is Van Trump’s. It contains information that I find no where else and I much enjoy his breezy style of writing…”
Dr. Charles W. Eriksen Oakland, IL

“Mr. Van Trump provides very valuable info into these unbelievably volatile markets. I feel so fortunate to have found his services. Out of the dozens of emails I receive daily, his is the always the first to get read…”
J.H. Hay Springs, NE

“I enjoy reading the Farm Direction Market letter each day. I’m just a tiny farmer in Ohio. Wish I had the money to try and take advantage of some of the suggestions Kevin throws out…”
HB SW Ohio

“I have been very impressed with your newsletter seems to the best around, Thank you…”
LLH Rexburg, ID.

“Since no one has a crystal ball—I feel Kevin Van Trump throws more items on the table which helps in making decisions in this every changing global marketplace..”
M.K. STBT IOWA

“I have gotten up in the middle of the night not knowing if I’m up or down thousands of dollars, wondering what I should do. Knowing that if the markets fall lower how mad I will be at myself I elect to get out, but then when I get out they inevitably go straight to the moon. Having Kevin’s report to read allows me to get some sleep…it truly helps me that much…”
Tim Sisk, Sikeston Mo.

“I”ve never seen a report as close to what the market does as Kevin’s, keep up the good work it interesting and look foward to it daily thanks…”
P B Brandon-MN

“Obviously the ‘all in’ trading style of the large funds make predicting any microeconomic move(which can be huge),with any certainty,an elusive exercise in price discovery….I enjoy reading ‘Farm Direction’,as it presents an intelligent presentation of the prevailing market moving facts,delivered in a humble, trader’s mentality snapshot…Very well thought out,it is comprehensive, and obvious that the author has great passion for his work..”
Mike, Chicago, Illinois

“Kevin’s advice on his daily column is very insightful. Covering all the commodities makes them all relevent. Great job Kevin….”
R.T. Wisner, NE

“I am not even a customer yet. I have been reading Kevin’s comments on a trial basis and they are the most indepth and detailed that I have seen anywhere. I will be signing up so I don’t miss out…”
DL Olton,Texas

“Being a retired absentee ‘crop share’ landlord, I find Kevin’s daily report an excellent way to stay connected on current market conditions. I anticipate his information each day and wish I had discovered it years earlier.”
L.K., Pittsfield, IL

“I appreciate Mr. Van Trump’s daily commentary and find it much more helpful than what I read from other sources. Mr. Van Trump’s market information is complete and thorough, and elucidates the interrelationship of the various commodity markets. It seems he never rests – on a Saturday night (November 20th) he issued a special bulletin to his subscribers in connection with an issue that arose after the markets had closed on Friday. The information could have significantly affected the markets on the next Sunday night’s trading. Though the information turned out to have been partially incorrect and the market’s reaction was muted, this dedication to his subscribers struck me as uncommon. To speculators and farmers alike, he is supportive, informative, and candid.
Dan Long, Orange City, FL

“I am following a few Agriculture newsletters, Kevin’s Farm direction is the best…”
G.M. Vancovuer, BC

“Kevin seems to think like a farmer when he gives his advice—it is easy to understand and seems to be right on!” W.F. Genoa,IL

“Kevin provides great daily market insights as well as keeping us informed on the events around the world that affect those markets. So interesting I even save them often and have my wife read them (she works off the farm)…”
Kurt Thoene Hartington, Nebraska

“Kevin keeps you level headed through the rough and tumble of grain trading. He keeps your eyes open to all possibilities….very helpful…”
L.T. Greenville, RI

“It’s unbelievable the information Kevin has in his daily report! I’ve never seen anything like it, its aw some! Can’t wait for the next report to help me with my daily decisions!”
Steve Brabec, Colon, Nebraska

“I regularly read and compare daily research and market comments from various sources and analysts, never have I gotten such full and comprehensive analysis of the overall market situation in one daily report . Your daily reports became my main news of the day. Please continue providing farmers with your valuable market advice and help us make good profits in this difficult and tough time..”
Alex, Orion, IL

“I am 70 years old and have farmed all of my life. I truly enjoy the depth and width of Van Trump’s knowledge of what impacts the grain market. All of this in one compacted report is amazing…”
Jim Fischer

“Kevin gives a great global perspective of the grain markets. He shows how important it is to not just look at the bountiful harvest we are having here in our own back yards. He gives you reassurance in your longer term perspective when the markets can get a little volatile in the shorter term. Keep up the good work…”
Shane Thoene, Steamboat Springs, CO

“I have found Kevin Van Trumps updates invaluable to my marketing strategy. His sources from around the world provide inside information that I don’t find with other marketing people. His comments give me alot to think about and help take some of the stress out of my marketing strategy…”
Robb H. VA

“I look for your report every day, it is very informative keep sending it thanks…”
Ray Larson Maple Park Ill.

“No NONSENSE grain and world report. Can’t wait to read it everyday. Great track record. LC, Danville, Iowa
A farmer/rancher simply does not have time to sift and sort through the multitude of newsletters, opinions and news events which stream in on a daily basis. Kevin does that for them then produces a well-written, concise and straightforward commentary covering national and world fundamentals which helps producers make the best decisions for their business. It is one of the most complete commentaries available not only for ag producers, but also valuable information for the speculator as well…”

D.K., River Heights, UT.

“I look forward to reading every article that Kevin has written. He is not like every other analyst that will flow with the wind. Kevin is not afraid of going out of the box and giving his real opinion. He sees a big picture and I really enjoy his enthusiastic views…”
B. Garry Minnesota

“I am a recent subscriber to Kevin’s newsletter, but I’m a long-time reader of many other high-profile marketing services. I am particularly impressed with the thorough manner in which Kevin evaluates every economic aspect, both nationally and internationally, that influences commodity prices. His analysis and conclusions are highly thought out and conveyed in layman’s terms so that the reader can comprehend the numerous and often complex interrelationships that impact the markets. Kevin is a real attribute to the agricultural sector.
Allen McGregor, Grand Island, NE

“Gee Kevin, working on Christmas Day- You are dedicated to your clients! I love reading your information that you put out daily, and you always seem very accurate! Keep up the great work!”
Gary Suhr

“Dear Kevin, You have done an amazing job providing us with your daily research and guidance. I’ve never gotten such wise and important market commentary from anyone in the industry. I consider you the greatest and sharpest that I have ever followed…my congratulations, keep up the great work…”
Alex Luckson

“I have been farming for forty years and have read many advisory letters over that time frame.None have been more informative than Kevin Van Trump’s daily news letter. Every day I look forward to reading what is happening in the world of agriculture…”
J. S. Pittsford, NY

“I find Kevin’s commentary very pertinent and extensive. This type of information is vital in the fast paced world markets we find ourselves operating in these days. His comments are very helpful in getting a “feel” of
what’s going on around the world and how it may effect our business…”

C.M. Missouri

“I have the trial subscription and have found it very helpful in selling my grain. Even though we are not big farmers, the information certainly helped to know we should hold on to some of the grain for later sales. We find your advice outstanding in explaining what is happening in the markets and why. You have better information than I have received elsewhere. Thank you…”
Eloise Laible

“Kevin’s daily email with marketing advice is top of the class filled with great information with unique hedge and speculative strategies that help enhance profitablity…”
Jeremey Frost, Grain Merchandiser Midwest Coop’s

“Kevin’s service is consise, insightfull, and personal. He will take the time to address your individual situation. A huge stress releiver in this market environment. This is market analysis you can use!”
Chris Dexter, MO.

“As a national federal farm policy administrator and commodity producer, I find it critical to keep updated with what is going on in the real world of agriculture and with the domestic and global markets. Of all the services I’ve have been privy to or have subscribed to over the past 20 years I’ve found in the past several months of engaging in your “Farm Direction” services to be the best perception and analysis of what is really happening in today’s world. Not only here in the United States, but across the globe as well. US farmers need this type of help and information to assist them in their daily efforts. I commend you for a job well done. Please let me know if I can ever be of any help or assistance to you in the future…”
L.T. Assistant Deputy Administrator for Farm Programs USDA

Agricultural Risk Management

I have made it my goal here at Farm Direction to help America’s farmers improve their overall grain and livestock marketing results.

Most firms want you to believe this is an extremely complex and complicated task in order to charge you over inflated consulting fees and commissions. I have attempted to simplify this process and provide you with the most economical yet professional service int he industry.

As many will tell you, I provide the best information, market commentary, and strategy in the industry at the most affordable rate.

We provide our agricultural clients with the following services:

  • Cash Marketing Strategies – We begin by designing a custom  annual cash marketing program specific to your inputs, break even’s, and financial goals. The program is designed by using complex seasonal pricing patterns and formulas in association with over 50 years of historical price data and analysis. Once your estimated yields and inputs are entered into the system you will start receiving automated recommendations telling you not only the best price to sell at, but also how much of your projected production to price at that time.
  • Risk Management Advise – We help each of our clients design and build custom hedging strategies that best fit their needs. We believe that no two farm operations are the same. Most firms simply design a hedge strategy that best fits their top clients, they then have their advisors or brokers sell that strategy to all of their clients. Unfortunately for most the strategy is not what is best for their financial situation or farm needs. Often times it leaves the farmer cash strapped chasing margin calls or holding a bag of worthless options and a small fortune in losses. We take a completely different approach, and work individual with each client developing the best strategy for their particular situation.
  • Free Text Quotes – Market quotes sent directly to your cell phone three times a day, featuring the opening price, mid day update, and closing bell.
  • Weekly One-On-One Advisor Consultation – Each week our clients receive a call from their personal marketing advisor to discuss recent news, developments, and conditions that are affecting the marketplace both here in the US and abroad. Clients stay updated on South American production estimates, crop conditions reports, global demand numbers, with highlights from China, India, Brazil, Russia, etc..and how they are affecting the markets.

Our Ag Risk Management Program can certainly help you reduce the stress and risk you face everyday as a producer. From our  highly acclaimed Cash Sales Program, to our individual designed hedging strategies and one-on-one consultations we simply offer more for less.

It Starts By Having The Right Plan

As prices become more and more volatile farmers can no longer afford to have a sit, wait and watch approach to marketing. To be successful in today’s marketplace farmers need to have a proactive approach to pricing their grain and livestock.

Throughout my career, and especially as I began working with more and more farmers I realized that very few had a detailed or strategic type marketing plan in place that was producing quality results.

Similar to being a professional trader, farmers are often faced with tough split second decisions regarding market timing and price direction. Without a solid plan and program in place more times than not we find ourselves making emotional type decisions based on a knee-jerk reaction to the market and recent news or information that has moved the market.

Generally speaking these types of emotional decisions rarely turn out the way we had hoped. For years farmers have been plagued with making often hasty or poor marketing choices, I blame it simply on not having a plan or more importantly the right plan in place.

You need a plan specific for you and your operation. A plan that takes into account your available cash flow, your needs and your objectives for your farm.

As a member of Farm Direction one of our first steps will be to build and design just such a plan and program for your farm.  With a handful of specific inputs from you regarding your operational costs, inputs, yields, etc… we are now able to generate a completely automated marketing program for your farm.

The FD PRO Marketing Program will help you take the guess work out of marketing. No longer will you have to worry about making those emotional decisions regarding the market. You will now have an easy to understand and easy to follow approach to marketing your cash grain. You will know such things as when to sell, how much to sell, when to hedge, how much to hedge, seasonal price tendencies, and much more.

The best part is the program is yours to keep and is completely customizable year after year. Simply change your projected estimates and yields and you will be given a completely new set of objectives and strategies to complete your marketing needs.

Similar to being successful as professional trader, today’s farmer needs a successful plan.

“Do you have the right marketing plan for today’s volatile market, is your plan proactive enough to compete, lets explore…”

I always like to tell my clients that we have to be “proactive” and not “reactive” with our marketing approach. This formula requires that we plan ahead and have a well developed detailed marketing plan in place. The plan has to include Pre-Harvest and Post-Harvest pricing decisions based on our projected production costs and include selling strategies and concepts that you will implement along the way too take advantage of strong seasonal price tendencies.

It is my belief that too many operations market their agriculture in a reactive manner. I didn’t realize it until I started having more and more first time clients call up with similar problems and questions. One of the big ones I hear every year is when harvest thoughts start coming into mind and there is still grain in the bin. The first reactive approach is to take the grain that is in the bin and go sell it to make room for the crop that will be harvested. Unfortunately that is the reactive approach of about every farmer out there and in turn the market is hit with heavy supply. You can’t allow yourself to become reactionary to these outside influences.

I constantly preach having a strategy and plan mapped out so you can avoid these reactionary mistakes. I am not however preaching that you go nuts and hedge or buy options every month in an effort to be proactive. I think most advisory services or brokerage operations often become too overly proactive and ultimately cost you money with the purchase of worthless out of the money options, or rolled positions that simply continue to rack up fees and commissions. Somewhere in the middle of the road is a happy medium.

I like to believe here at Farm Direction we provide our clients with a simple, easy to follow, result driven approach to marketing. Not reactionary, and not over the top with exotic futures and options strategies or complicated hedging programs.

“The debate continues over using futures or options, as a general rule I do not like using them, but there are certain situations where they need to be considered…”

As you all know I professionally traded futures and options for a number of years. Along the way I have heard the horror stories of how farmers have often been misguided or mislead in using these instruments to properly hedge risk or price their crops.

I rarely recommend using either futures or options for many farmers, but there are certainly some circumstances and market conditions that warrant a close look and some consideration.

To make certain we are on the same page lets review a few simple basics. Straight futures contracts when purchased or sold have significantly more risk associated with them than do the purchasing of calls or puts. Futures contracts have unlimited upside potential and unlimited risk. When options such as calls and puts are purchased they only have the downside risk of their initial purchase premium.

Example: You buy 2 December $3.50 corn puts to try and establish a price floor in the market. You pay $1000 each for the put options (a total of $2,000). On expiration the market settles above your $3.50 strike price, therefore causing your options to expire worthless (what the industry likes to call out-of-the-money). Poof your $2000 is gone and you are mad as can be thinking you would have been better off simply doing nothing at all. The truth is you may actually be correct, the exchanges have done study after study and found that over 80% of all options purchased actually expire worthless. Don’t get me wrong I think there may be a few select times when purchasing a put to build a price floor or buying a call for re-ownership might be a good play, but for the most part I believe there are other less costly strategies available.

This is why many professional traders prefer to turn the odds in their favor and sell the options. There are definitely some times when selling options could be a profitable play for the farmer. Lets look at a simple post harvest strategy that would work well.

Example: You have 20,000 bushels of corn stored in the bin. The market is trading at $4.00 but you think we could push higher in the coming months and would be a much happier seller at $5.00. You go out and see that the December $5.00 call is selling for $1000. Each contract is equal to 5,000 bushels. With 20,000 bushels in the bin you elect to “sell” 4 December $5.00 calls. In turn you collect $4,000. If on expiration the market settles at or below the $5 dollar mark you keep the entire $4,000. Anything above $5.20 and you start to lose $200 a penny on the option contracts you sold, but you are also gaining penny for penny in the cash. You can also elect to to use some of the $4,000 premium to purchase puts if you are worried about downside risk. This way you are using the markets money to buy the options. There are several times through out the year when the market and your particular situation could warrant selling options to generate revenue.

Straight futures can also be a viable option in certain circumstance, you just have to understand the dynamics of the risk associated and how you can best manage it. Lets look at a simple example of how futures could have helped some people out recently with the wild price swings.

Example: We have all heard about the corn producers who made a few great forward sales in the $5 and $6 range to the ethanol plant (these guys had a marketing plan and executed on it) the only problem was when they went to deliver the ethanol plants had declared bankruptcy and it wiped away their contracts and commitments they had made. I am starting to think we might see more and more of this in the coming years as the price fluctuations get larger and larger. Companies will make costly mistakes in hedging their inventories and deliveries and will ultimately force them out of business.

The only way I see to avoid this situation would have been to sell the futures contracts directly rather than forward contracting with the ethanol plant. The exchange is certainly more financially stable than the ethanol plant. Assume the futures price was trading in the $5-$6 range when you forward contracted with the ethanol plant, rather than contracting with the plant you decide to sell straight futures. You sell the futures contract at $6. When you are ready to deliver your corn you close out the futures contract and have even some additional advantages now by being able to deliver your grain to what ever market is offering the best basis. That could be a local hog operation, an ethanol plant, or a local elevator.

The downside is you will have some margin call responsibility if the market moves higher, but you will be earning penny for penny on your cash side to offset it.

To summarize, no I do not think futures and options should be your primary tool for marketing. I do not own a brokerage firm or sell crop insurance so I have no vested interested like so many others in steering you in that direction. I have however professionally traded and advised many clients through the years on futures and options trading. I believe there is a specific time and place for these marketing tools to be considered, but how well you manage the risk and what strategies you use will ultimately determine your outcome. If you are wanting to travel down this path I suggest developing a good relationship with a licensed broker, make certain you know the entire risk of the strategy, and remember what i said about options more times than not expiring worthless.

Van Trump’s Farm Direction Helps Today’s Farmer

ELIMINATING the GUESS WORK

By: Timothy Rexrod

I had the chance to chat with Grain and Livestock marketing guru Kevin Van Trump at the Western Farm Show this past week in Kansas City, MO. To say the least Van Trump was a fascinating interview, he spoke extensively about where he see’s the market heading both long and short term, how farmers are often talked into trading futures or options they simply do not need, his company Farm Direction and more specifically the launch of his much anticipated FD PRO Marketing Plan & Strategy Tools.

When I caught up with Van Trump he was certainly the center of attention, with a large group of farmers huddled around listening intently to Van Trump tell stories of his days at the Chicago Board of Trade and the Chicago Mercantile Exchange, at that time Van Trump was working for one of the largest Grain speculators in the World. He claims to have learned all of the in’s and out’s of the markets working his way up through the ranks at several of the countries top commodity exchanges.

After leaving a successful career as a top adviser and research director at one of the largest clearing firms in Chicago, Van Trump now calls Kansas City home and spends the majority of his time helping farmers develop marketing strategies to improve their results. Van Trump will be the first to tell you he is not real big on farmers using futures and options as a main strategy or pricing tool. That seemed odd to me as Van Trump’s background is so deeply entrenched in the trading world. He stated, “I believe there are certain select times and specific market conditions when futures and or option strategies could be considered, but for the most part a successful marketing campaign begins with cash strategies developed around a sound marketing plan.” That is exactly what Van Trump claims to bring to farmers with his new FD PRO format.

Van Trump is a huge hit with farmers because he brings them exactly what they are looking for. “I believe farmers are looking for good sound honest advise about the markets and strategies they can use to help improve their marketing results.” He went on to say, “I don’t own a brokerage firm or sell crop insurance, so I am not trying to talk the guys into something they don’t need, they appreciate that.” He believes that for the first time the farmers actually have someone on their team looking out for their best interest rather than an adviser who is constantly trying to sell them some strategy that involves paying for options that most generally expire worthless or leaves them constantly searching for money to meet heavy margin calls.

Van Trump loves being away from all of the hustle and bustle of the markets, and really feels good about being able to give farmers the information and advise they have so desperately needed and have been searching for. Van Trump said, “I get more gratification out of helping my clients today, than anything I have done in the past.” He stated that many of his clients have since become life long friends.

Van Trump told me that he left the trading world to start Farm Direction, not only for the gratification it has brought him but also for the freedom it has provide him and his family. Ask anyone and they will tell you Van Trump’s family is first and foremost. As rumors have it Van Trump walked away from several seven figure offers in Chicago, to move his family to a small rural community just outside of Kansas City. He closed our conversation by showing me pictures of his two beautiful children, bragged about his son’s athletic abilities, his daughters guitar playing  skills and how he has been in love with best friend and high school sweet heart for over 25 years.

Regardless of if you do business with Mr. Van Trump and his company Farm Direction, he is certainly an individual you will want to call your friend and have on your team for years to come.

Professional Hedge Execution

We do NOT require that any of our clients have or use a futures or options “hedge account”. However, if you are looking for a place to clear your business or help you with your transactions you are more than welcome to call my personal broker.

I use Mark Knight and his team of licensed and professional advisor for all of my trading needs. I personally hired Mark, over 20 years ago while at the KCBOT, and he does a tremendous job.  His firm “Ag Hedge” has helped drastically increase our clients overall performance by providing the latest in cost effective, flexible trade technology and execution services.

Mark allows all Farm Direction clients to set-up and establish a personal hedge or speculative account with “NO-Minimum Balance”. This allows you to set-up an account with zero money and no commitments. This way if you ever need to use the account the paperwork is already completed, the account is open and you are ready to go.

Another reason I like using Ag Hedge is because their trade execution platforms and order entry systems have not only been designed to handle individual client needs, but also the needs of active Hedge Funds, CTA’s, Commercials, and Institutional Traders who are looking to increase their execution services without increasing their costs of operation.

All of their transactions are made using multi-broker electronic routing systems backed up by traditional direct floor pit access phone communication. This gives them the ability to work orders for our clients in the most efficient means available at any given time. Certain market conditions may dictate using electronic routing of orders where in other situations we may want to call directly to the floor and get a feel for the market before executing our trade.

Regardless of the size of your account or the markets you are trading, they provide all of our clients with unequalled service, trade execution and reliability.

Call and talk to one of their execution specialist today to determine which platform and trade execution program best fits your needs.

  • Broker Assisted Trade Execution
  • Online Trading Platforms
  • Direct Floor Access
  • 3rd Party Trade Execution
  • Commercial & Institutional Trade

Grain Marketing 101

“How to design and build the best marketing plan for your specific operation has to be one of the hottest topics of discussion these days…”

By Kevin Van Trump

As a professional trader at the Chicago Board of Trade and the Kansas City Board of Trade I have had the opportunity to offer my opinions and guidance to many diverse clients through the years. I have advised some of the top speculators in the industry, hedge fund managers, floor traders, commercial clients, banks, etc…My favorite though continues to be the farmer.

Having been raised in rural Missouri, helping my grandfather when I was younger on a small farm about an hour north of Kansas City, I quickly learned at an early age just how how tough the farming business could be. I was fortunate to receive a great education and have been given the opportunity to apply my skills as a professional trader. With 20 years of industry experience under my belt I have decided to return to my roots and exclusively devote my attention to helping farmers improve their marketing efforts.

It is my belief that it all starts with a proper marketing plan. A marketing plan that is both right for you and your operation. The plan does not need to focus on market direction, as those are circumstance we can not control. The plan does however need to focus on producing results in all types of market conditions (bull markets, bear markets, and sideways channeling markets). The plan has to be simple to follow, easy to understand and quick to execute. Trading professionally has taught me how important a quality predetermined plan is.

I believe you need both a pre and post harvest plan that takes into consideration your anticipated production, storage capabilities, input cost, crop insurance, etc…

The plan has to help you minimize mistakes and takes advantage of timely market conditions. I have learned through the years that I can not predict market direction, neither can anyone else consistently, but I can build a plan and program that will incorporate strategies to help you take advantage of the specific markets movements and conditions as they arise.

All we need to start building a quality marketing plan is your cost of production, from there we can begin adding pieces to the puzzle. I can’t stress enough how important it is for farmers to know and understand their costs of production and the variables it includes.

I will show you easy ways to market where you can take advantage of the strong seasonal tendency’s and pre-harvest market conditions, what to look for in early spring pricing, ways to capture and improve local basis levels, strategies to use when you are into the summer months with very little priced, how to exit post harvest positions, strategies and ways you can earn income while storing your grain and waiting for price movement, etc…

As the markets become more volatile, having a grain marketing plan and someone on your team who knows and understands how these markets move will be directly proportionate to the profits you are able to achieve.

Frequently Asked Questions

“I Want to Start Helping You Improve Your Marketing Efforts Today…”

First let me answer a few questions that most prospective clients want to know.

Q: What makes you any different than all of the other marketing advisors?

A. What I offer is unlike the others in the industry. To start with I do not own, operate or work for a brokerage firm or crop insurance company, therefor I have no vested interest in talking you into trades, hedges or coverage’s you do not need. I focus my attention on helping you improve your current marketing techniques, not over complicating the process with confusing and complicated new strategies. I have no contracts to sign, I work on a month by month basis for you and your operation, if you are every unhappy with my services you owe me nothing.

Q. How will you help me?

A. With over 20 years of experience in the industry, as both a professional trader and advisor I have learned what farmers need in order to improve their profits. It starts by building a detailed comprehensive marketing plan that can produce results in both good and bad markets. As part of your team I will build and design a strategic marketing plan specific for your operation. The plan will be comprehensive in nature and supply you with specifics as when and where to sell, how much to sell, and ways you can easily improve your marketing results in any market condition. This completely automated program is your to keep, regardless of if you chose to continue working with Farm Direction. The program will forever change the way you look at your marketing efforts, improved results will be immediate, and the custom program is yours to keep.

Q. Will you be able to tell me when I should Sell orHedge?

A. Once we have completed your custom marketing plan, and really understand your goals and objectives we are ready to take “Action”. For most of my clients this is the part of their program where it often falls to pieces. For most it is the simple lack of understanding or development of a solid plan or more specifically the marketing tools that are available and at their disposal during various market conditions, this puts the entire load of their marketing program on one big decision – to sell or not to sell.

As you will learn once you start using your professionally designed and highly effective marketing plan, the decision of when to sell grain is going to actually be very simple, when to pull the trigger and with how much will no longer be an emotional knee-jerk reaction to the market. Your decision to execute a sale will be based on your specific predetermined risk parameters, goals and objectives. With today’s rapid price fluctuations you must be able to execute and take action immediately, you can longer afford to take the watch and react approach. You must change your strategy to become more “Pro” active and less “Re” active. The market is changing rapidly and you need to change accordingly.

My goal is to help you make a more well educated timely decision and provide you with feedback and thoughts about your toughest marketing decisions:

  • Should I Sell Now or Later?
  • Should I Hedge for latter sale or to retain ownership of sold grain?
  • Should I Store My Grain Now for a latter sale?
  • How Much Should I Store?
  • Should I Hedge Any or All of What I Stored?

Once a decision has been made that prices and market conditions warrant a consideration to sell grain, the next decision is what strategy to use. Sell straight cash (or forward contract) use HTA’s, Basis Contracts, futures options, etc…This decision can frequently be worth $0.25 or more.

Q. Can you help me find the right strategies for my particular situations?

A. I found that though creating the right plan for them was essential, most of my clients where wanting more. They wanted to have someone to call, someone they could ask about specific market conditions or strategies they could use to lock in a price, and still have upside potential. I provide my clients with that service. Having worked for years at the Chicago Board of Trade and the Kansas City Board of Trade I have made some of the best contacts in the business. I have the information you want and need to make better marketing decisions. All of my clients call or e-mail for honest insight and information about the current market conditions.

I also help all of my clients build specific strategies based on their particular situation, this provides them with what I call “marketing- options”. They tell me their current situation, what they are thinking about doing, their current thoughts about the market, if they want to free up some cash and still have upside potential, if they want o lock in some profits, or earn income while storing their grains. From there I go to work and build three or four strategies that would accomplish these goals, I present the techniques and strategies, also provide them with the associated risk involved in each, the money (if any) required to perform implement each, and from there my clients can make a more educated decision about what strategy best fits their individual needs and risk.

Example: The Wilson’s have 300,000 bushels of corn in the bin heading into the winter months, the corn has been tough to dry out and there is fear that shrinkage could occur. They call in and want help or suggestions on what to do.

After more discussion we find out the Wilson’s believe the market is eventually going to head higher, but they are worried about the quality of the corn. After more talk Joe tells us they are getting a little cash strapped, they have a big family vacation planned and a daughter that is getting married.

We go to work and come up with three specific strategies and scenarios where the Wilson’s could free up some cash, still play the market to the upside, and reduce their worries or fears about the quality of corn in the bin. Each strategy is sent to the Wilson’s in an easy to understand format with specifics regarding cost, potential, risk, etc…The Wilson’s can then use those scenarios if they see fit or they can call in for further details and information regarding each strategy.

Q. Is there anything else I need to know?

A. In addition to helping you take Action and Implementing your Marketing Strategies, I am committed to keeping you up to date on the latest developments and breaking market news. You will be sent weekly, monthly and daily updates regarding specific market action relevant to your operation. These reports and updates are in an easy to read format that makes following the markets quick and painless. No longer will you be forced to spend hours sifting through hard to read research and technical data to find out what moved the market. Our Farm Direction Reports are packed full of accurate quick hitting market news and information. You will also have access to free market “text quotes” or friendly phone quotes provided by our professional staff.

One Last Thought…

Being a farmer in today’s volatile market is not much different than my career as a professional trader, I am sure we have both had our fair share of restless nights due to unforeseen market movements or extreme price swings.

More times than not I found my self in those precarious situations because I had no detailed trading plan, no detailed exit strategy, and no detailed profit objective. With no detailed plan in place it became extremely emotional and more times than not I made very poor decisions. I would exit a trade and the market would immediately turn around, I would be kicking myself for weeks as I watched it rally to new highs. It was not until I learned proper risk management strategies and how to build effective risk models from a few of the seasoned pros that I was able to take the emotion out of game and was finally able to make good sound educated decisions.

With the price swings of today’s grain and livestock markets, a marketing plan that can produce results not only in a bull market, but when the market is moving against us or in a choppy sideways trend will be imperative for your long term success. I understand how to build that plan, as a member of your marketing team I will also be by your side to explain a host of additional marketing strategies and techniques you can use or implement in various market conditions or situations to improve your profitability.

Screen Shot Examples of an Automated Custom Designed “FD PRO Marketing Plan”

FD PRO SCREEN SAMPLE

FD PRO QUICK TRAC TOOLS

FD PRO AUTOMATED SALES LOG