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01-14-2018 11:51 AM
And our pilots (including admistrators) have the stick locked one position.
It’s time for new thinking and new action, but that would be off topic or leaving the “traditions of the elders”.
01-14-2018 12:36 PM
One guru`s plan was, of course know your cost of production the group consensus was breakeven $3.25 cash (so subtract your local basis from Dec corn) okay then sell 20% when you can get $3.50 cash and another 20% at $3.65 cash, utilizing crop insurance protection. There are a lot of additional issues like, will some of us be offered $3.50 cash? If we get to July and the best you could`ve done at that point was $3.55 cash and the offer was a day or two, do you dump your APH at anything above $3.50 if your corn looks good? Or figure holding after harvest with options strategy?
Also, I have a feeling the gals at the coop will be busy writing contracts anywhere near $3.50 cash. Perhaps $3.40 cash you dump 30% APH? To beat the rush.
01-15-2018 10:11 AM
I'll try to buy some OTM courage calls either in the typical winter seasonal low period or if there's any kind of confirmation of a bottom before.
Odds favor some sort of a seasonal rally later but I'd use the calls to sell against.
A crop reduction of a magnitude to move into the upper half of the decade's range is a 1 in 10 shot, or worse.
Harder to handicap the likelihood of some event(s) that turn the funds around and create a good selling opportunity.
Most years have one, last year didn't. In '16 all it took was a little hot dry weather and some weather gurus hollerin' drought.
Problem is that farmers are the people most likely to believe that BS, which is why the calls.