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Veteran Advisor

Hedge-To-Arrive, Anyone?

This week's Successful Marketing Newsletter is out. Take a look. This week's newsletter suggests that basis levels should be firming and now may be the time to consider a hedge-to-arrive contract.

 

Here's this week's Successful Marketing Newsletter

 

 

Thanks,

 

Mike

2 Replies
Veteran Contributor

Re: Hedge-To-Arrive, Anyone?

If the basis is good and you like the overall cash price being offered by the current futures price +/- the basis being offered, why do a HTA?

 

Normally a HTA is done when the futures price is at a level you feel comfortable with but you think the cash basis will get better vs. the futures price and time you are looking at.

 

Perhaps a basis contract can be considered if you like the cash basis being offered but the futures haven't hit your price level.

 

Maybe I am missing something.

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Highlighted
Esteemed Advisor

Re: Hedge-To-Arrive, Anyone?

You didn't miss a thing Citi....the article is talking about some day in the

distant future, the very distant future according to the media, that

when the deferred contracts rally then use a HTA......

 

They are normally called NoBasisEstablished contracts by most at

this point, not HTA  (due to some misbehavior in prior bull moves...errr 1996)

We do 100% of our grain this way and then fix the basis at a different time.

Always have to make two seperate decisions to maximize storage

returns has been our experience in our shipping area.

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