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Hobbyfarmer
Honored Advisor

Glass more than 1/2 full

Just cruising through the markets this morning,

I see ADM Des Moines has $10.015 Dec/Jan delivery

 

The flint hills e plant is $3.85/6 for same time frame

 

Both better than where we just came from.

Both better than where we are at cash prices right now.

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5 Replies
roarintiger1
Honored Advisor

Re: Glass more than 1/2 full

One would think that they truly expect higher prices by then.   They are not alone.  Smiley Wink

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Hobbyfarmer
Honored Advisor

Re: Glass more than 1/2 full

Massive over supplies as preached by the experts are not reflected in the markets going forward.
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JimMeade
Veteran Advisor

Re: Glass more than 1/2 full

The harvest ending stocks are projections based on what we have and what many expect us to plant.  They are not locked in concrete.  Fall pricesinclude the risk premium that buyers are willing to pay to ensure product.  Farmers who want to accept the risk can sell at these prices.  As the season goes on and we know more and more about supply, the risk premium will be taken out and prices will more closely reflect what is actually being grown.  It's just normal seasonals at work.  If we get a drought or the trade war blows up, that will add new information and prices will adjust accordingly.

High prices in the spring don't mean high prices at harvest, as we all know.  We can hedge by selling ahead or we can sit and wait and see what is on the table at harvest.  If we hedge we're accepting the risk that we can deliver and if we wait we are accepting the risk that prices will move, usually down.  It must be spring.  Smiley Happy

 

 

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elcheapo
Veteran Advisor

Re: Glass more than 1/2 full

? On the moonshine still. If you contract but
To them, and you don't raise, do you have
To go out and find corn or is there a settlement
Method ?

If you think above prices good, lock in and
Get a call
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Hobbyfarmer
Honored Advisor

Re: Glass more than 1/2 full

Why buy a call? 

 

Why not just get the check from the sale and move on ?

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