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Senior Advisor
Posts: 4,369
Registered: ‎06-19-2011
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Wheat call options

Anyone besides me considering the use of call options to reown 2012 wheat bushels already sold?  I needed the revenue of the bushels a couple months ago to pay for inputs for 2013 wheat on some additional acres added to my operation.  I think I left money on the table, is a call option the way to recoup on sold bushels?

Honored Advisor
Posts: 4,365
Registered: ‎01-10-2012
0

Re: Wheat call options

for your broker

Veteran Contributor
Posts: 108
Registered: ‎06-28-2012
0

Re: Wheat call options

Why would you want to reown $9.25 wheat?  Put the price in perspective of the range of prices for the last ten years.  $9.25 is in very rare air.

 

I think a more reasoned approach would be to delay pricing any growing 2013 wheat until more is known about crop conditions coming out of dormancy, especially with the insurance price. 

 

FWIW----The fall winter wheat conditions have very little correlation to the final wheat yield. 

Senior Advisor
Posts: 4,369
Registered: ‎06-19-2011
0

Re: Wheat call options

Won't even consider pricing 2013 wheat, I know we are a long way from harvest, but if things don't change soon and very soon, there won't be any to price.

Senior Contributor
Posts: 216
Registered: ‎05-13-2010
0

Re: Wheat call options

I like the cme, sept 013's say $11.90 to $12 costing a dime.

Figure cash wheat to $14 to $16 from now thru 013.

 

Honored Advisor
Posts: 5,131
Registered: ‎07-18-2011
0

Re: Wheat call options

Thanks Rightone,

 

I will study it more carefully.

Contributor
Posts: 15
Registered: ‎05-14-2010
0

Re: Wheat call options

"FWIW----The fall winter wheat conditions have very little correlation to the final wheat yield. "

 

It does if it's dead.

Veteran Contributor
Posts: 108
Registered: ‎06-28-2012
0

Re: Wheat call options

If it is dead then by definition your yield will be zero....... which most certainly will be UNcorrelated to the final yield.

Honored Advisor
Posts: 5,131
Registered: ‎07-18-2011
0

Re: Wheat call options

Kstater85 is that another place where the abandoned acres don't make the harvest calculations?

Senior Advisor
Posts: 4,369
Registered: ‎06-19-2011
0

Re: Wheat call options

I'm confused, why would a yield of 0 not correlate to the final yield?