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Veteran Advisor

Mike M2692830

Mike,

i'm a big picture economic kind of trader. the fundamentals have to make sense - supply/demand, etc

I like your last 2 posts about how this rain is probably affecting the balance sheet US and world.

 

I am real curious what the reaction to this very serious wet condition we are in by the cbot will be. It wil he hard to get planted acres much above 80% in my opinion. Even if it is at 85 there still remains 15% of the 97 million projected to be planted. What would prices look like today if USDA would of had planted acres under 90 million back in February. Seriously, not a wheel will turn in much of iowa this week. It will be well into next week before we can go if it quit raining by Wednesday. Forecast does not present that option. Say thanks to a vet today.....MikeM
 
you pose legitimate, serious realities that will eventually be expressed  @ cbot.
 
i don't think 15% is crazy...that's 82.5.....say growing yr is stellar and 78 m ac gets harvested @140 bpa.....that still gives you under 11b prod..........something to think about....i won't even run those ac with a lower yield--
 
thanks for your perspective!
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6 Replies
Senior Advisor

Re: Mike M2692830

Anyone who is convinced the CBOT has the futures for Dec corn undervalued should be buying callls, selling puts or buying futures.  How much of any of that are any of you doing?

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Veteran Advisor

Re: Mike M2692830

What would be the rational for doing that when you already own a growing crop, with crop insurance fall price option protection, as most purchase?

 

Does the term "Texas Hedging" mean anything?

 

Those that are not going to get the crop planted, and those that want to speculate may want to heed your advice, though.

 

Personally, I have my gambling bushels of 2012 corn and soybeans ready to let loose when the ethanol plant wants them for the $8 to $10 range, corn. My pitiful bean produce can be had for the $20 sum, delivered. Way better deal than buying those SA beans and paying to get them inland.

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Senior Contributor

Re: Mike M2692830

Jim, I have very little 2013 crop sold. A pittance of corn at 6.05 and a few beans above 12.50. I'm hedging with cash at this time. Buying calls and or puts will come the closer we get to harvest providing we do have a legit weather rally. This weather would be that rally....MikeM
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Senior Contributor

Re: Mike M2692830

Cx. I appreciate your comments and also your tech posts you make. I look at charts and understand the basics but a chart I read a month ago did not tell me the state of iowa would have had all this snow/rain the past month. It may mean nothing in the long run but still can't dispute unplanted intended corn acres the first week of June. This has to be realized....MikeM
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Senior Advisor

Re: Mike M2692830

Based on reading Marketing Talk posts, one would assume that most are Texas Hedgers, a practice I always found the height of lunacy for a producer.  I was doing a little nose twisting.

However, anyone who has new crop sold should indeed be giving some thought as to whether they want to maintain their position or get out of it.  I should have done that last year and ended up with half a dozen loads of corn and a couple of loads of soybeans that I let slide along at lower prices because I was a deer in the headlights.  I also missed the chance to sell at the high pre-harvest prices.

Your point that those with no crop in the ground may want to take an appropriate position is well taken.

I tend to be a seasonal kind of hedger and probably don't watch the markets closely enough to get in and out of the market iwth an appropriate hedge position.  I tend to take a position and forget about it for months.  Probably not the way to hedge these days.

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Veteran Advisor

Re: Mike M2692830

it's good we have different parts of mkt participants on here even though we're really ALL on same side in a business sense.

 

directly after the stocks report, mkt action and $$$ flow spoke"capitulation" to me----wild, b/c no-one, strong hands included, could have forseen Apr-May weather, as you say, Mike.

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