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12-03-2018 06:12 AM
December 2019 futures trading at $4.02......wait a little for the $4.25 bid.
HTA your insured bushels......If it is a big crop again, roll the Dec 2019 to July 2020 for a 35 cent gain.
$4.25 plus the .35 equals $4.60......set the basis at .40 under for southern MN, Northern IA.....$4.20 less five cents in HTA and roll fees....net price for your bushels $4.15.
If it is a short crop, like this year, and the carry doesn't materialize, bite the bullet and roll for a twenty five cent gain. My hedging this year netted an average June/July 2019 net price of $3.91 since we only had a twenty six cent carry to work with. Doesn't buy steak, but does keep us well fed with hamburger even with the short crops we are experiencing.
Same for Soybeans, but target $10.25 November futures or so when the opportunity presents itself. The carry on soybeans is not always there so you may end up setting the basis for fall delivery and getting money for cash flow.
Not trying to be smart about it, but this is a pretty basic strategy, and one that has kept me in business for the last few years of lower prices and tight margins.
Maybe this is the year that corn sky rockets and $4 corn looks as bad as all the $3 corn I delivered back when the ethanol boom first took off and I had several years hedged. Now I just go one year at a time after I know my expenses. And I always keep some bushels unpriced for the run up when and if it finally occurs again.
12-03-2018 07:06 AM
Currently corn up 3 and beans up 14 which I think is a good thing rather than a couple days of limit up followed by limit down. Traders anticipated that they were emotionally expected to strap the bull to the rocketship and seem to be choosing to slowly climb the mountain. That will appease the chart guys better.
12-04-2018 08:52 AM
Thank you. That is probably the best plan that I have seen in the last few weeks. I keep wondering if wheat acres will be down this coming year and beans don't drop as much and we gain 7-8 million acres on corn. Price wise, corn seems to be winning out on acres. This is on my farm and your farm will be different. Maybe working capital will trump that. Prices I hedge in the spring will determine my acreage mix. I just don't know if I have time on my side. It would be sad if we have already seen the highs for 2019.
12-05-2018 10:00 PM - edited 12-05-2018 10:37 PM
Yes on selling cattle.
have been laid up w a bad leg break for the past year.
should be after Cattle pretty hard again say by Feb 2019.
were drier than dry so will have a lot of spare cows and Pairs again that need to leave for greener pastures.
And cows are actually the Best Buy in the market now too.
A lot of these spring calling cows are $800 to say 950$ and heck good calves bring $1000 to $1100.
And these cows will last another 10+ years more too.
say pairs by spring will cost $1000 to $1300...bout the same as now.
150 to 350 lb calves on this weeks pairs.
12-07-2018 07:58 PM
I have a corn sell bid in at $4.25 on the board. Nothing on beans yet. $10.25 might be an attractive sale.
It's possible those prices won't be touched, although in many years we get a bounce that surprises us. The carry out is pretty big in beans, isn't it? And China is looking south.