03-05-2013 11:42 AM
So, what's the play here? Are we all waiting for another drought? Do we expect China to buy corn and make a rally for Dec 13 corn opportunity? Experts say buy a bunch of puts and lock in a $5 floor. Why not sell today and buy calls? I'm honestly scratching my head for the right strategy and wishing that $6+ bid last fall for '13 didn't seem cheap like it did when cash was $8+. Your thoughts and moves??
03-05-2013 12:05 PM
....assuming "the experts" are the brokers wishing they had more usual farmer business for this time of year....sometimes "no action yet" is the best strategy/play...this appears to be resounding in the community.
ask yourselves why new crop is now priced about a dime cheaper than it was 3/5/2012. What's with the deflation? Is it a trap? Does the mkt know 2013 production will be much better?
03-05-2013 12:39 PM
IMO with less than a 650 m bu carry out for corn there are a lot of things that could go wrong that we could have a nice spike up in prices so why not wait and maybe buying a few defense calls now and sell later if the spike occurs
03-05-2013 12:49 PM
Seems to be what the strong $$ is telling us, NDf.....The experts are squirming and trying to "market" to customers to "protect" this low price now in case it just goes lower from here.
03-05-2013 12:57 PM
...and thats exactly what the market has priced into the equation......A DREAM!!!!
Mark Goldylocks is on agweb once a week that corn yields could hit as high 16 billion... BUY OPTION!!!, PROTECT YOURSELF!!! YOUR GONNA MISS THE BEST OPPORTUNITY!!!! CORN COULD EASILY BLOW THROUGH $4.50!!!! PUTS ARE CHEAP!!! GET COVERED!!! blah blah blah blah... SMART FARMERS ARE GETTING COVERED!!!! puke, consume, blah blah blah...THE WEATHER PATTERNS HAVE SWITCHED!!!
Don't get me wrong, the potential is there TODAY in dream-land for a huge crop...Maybe 13.8-14 billion assuming all things blessed on all bases... But I'm so sick of the rhetoric these "MARKET ADVISERS" spew... And they wonder why guys aren't calling...
03-05-2013 01:10 PM
But what if they are right? Some have been screaming for us dumb farmers to get it sold from when we sat in the combines last fall. Who would contract several thousand bushels today for a $6.20 or even a $6 bid? I would sell over 50% for sure if that was offered right now. They could be right and looking at the charts, it is one long skid since New Years. Beans too.
Personally, we are going to have a repeat drought. Maybe not as widespread or severe as '12, but the western corn belt is still seriously dry. I think we will see selling opportunities ahead, but I get real nervous wondering if the highs are way past us.
03-05-2013 01:18 PM
My advisor recommended to me that I buy back any 2013 bushels already forward contracted. I received the message just this morning. One thing for sure, the brokers are making money on all these contracts. I'm just about finished with them. I'm glad I hadn't contracted a single bushel.
03-05-2013 01:28 PM
I have been forward contracting profits enough to meet fall payment obligations and crop loans just to be assured...
The rest is
Grow it, bin it, sell it....
I know it's old school, but I got my hind-end re-cut in 2008 market fiasco after listening to my market guru.... NEVER AGAIN!!!
Oh yeah, got a new market guru..........ME
03-05-2013 01:30 PM - edited 03-05-2013 01:32 PM
From my vantage point, Dec has absolutely no risk premium built into it. Plainly spoken, current "new" price has nothing to do with reality, and everything to do with opportunity.