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In 2009, the March USDA stocks report shows that there will be almost as much grain to move before September 1 as last year’s record second-half disappearance of 6.46 billion bushels of corn and soybeans. This year there are about 6.3 billion bushels to move, and managing logistics and transportation effectively will be key to maximizing profits.

WHAT GOES UP . . .

What you buy and receive you must eventually liquidate. Don’t get lulled by weak basis and wide futures carries, continually adding to a long basis position with no thought to the logistics of how or when you’ll move the inventory out. The basis (carry) will eventually peak, and you’ll want to be able to ship fast enough to capture those merchandising gains.

Monitoring your logistics position also lets you manage your purchases and bids. Setting daily bids against premium markets can make you look great compared to your competition, but it’s a loss waiting to happen if you can’t execute to the best market. Buying against train values can be a trap if cars aren’t available.

TOOLS DON’T BUILD THE HOUSE

A logistics worksheet by itself won’t make money for you but it will keep you focused. Combine it with a detailed daily position Report, adequate working capital and bank credit lines, and a solid feel for today’s merchandising environment, and you’ll have the tools you need to “build your house.”