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Jim Meade / Iowa City
Posts: 2,318
Registered: ‎04-30-2010
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More Advice To Sell Beans Buy Calls

[ Edited ]

I think Steve Johnson of ISU Extension read Roy Smith's article on the inverse in soybeans and ways to use that to one's advantage.  He proposes to sell beans and buy July calls.

http://www.farmgateblog.com/article/1698/soybeans-to-sell-or-not-to-sell.-that-is-the-question

 

"Summary:

 The soybean market is paying for soybeans now, and offering much less money through next summer. At that time, the inverse carry would be reflecting the expected large supply of soybeans coming from South America. While soybeans hold more value now than they will next spring, selling cash beans now and purchasing a July call option will allow the holder to recapture some of the higher prices that could occur for soybeans, should there be weather problems again for Brazilian and Argentine producers."

 

Here's the discussion we had earlier about Roy Smith's article.

http://community.agriculture.com/t5/Marketing/Inverse-in-soybean-futures/td-p/256731