looking for confirmation of a top

[425Cat]

Looking for confirmation on this top , maybe a gap down this week leaving an island or something. She might have went far enough.

Hope she rallies back during harvest to set the harvest price on insurance.

[Silverwheaton]

Should a person hedge the current price and lock it in until the fall price is set for the insurance bushels?

[425Cat]

Only if you are confident you will have the production to cover the hedges.

If not sure of your production you will have to roll the dice on the harvest price for insurance. Don't how you would hedge it with no production unless you bought puts . Expensive though.

Some are advocating selling your insurance guarantee bu regardless of production , but why use insurance money to buy out contracts that you can't fill  or cover hedges that might go against you. There might be a lot of basis risk also that your insurance will not cover

[p-oed Farmer]

425...... With all of the tension that has and is building in these markets..... There is no way this thing can end with out a big bang...... We have not seen a big bang yet....... You just can't have end users talk about quitting..... It has to really happen...... We have not had the blow off top just yet IMHO...... p-oed

[Silverwheaton]

Hey 425,

I am talking about hedging the bushels that we are short that the insuance will guarantee at the higher october price.  Except the october price could, maybe be 2 dollars lower than where we are this summer.  So I am saying sell it(paper bushels) this summer hopefully at the high(never will get the high) and if it goes down into october we will gain on the paper shorts.  But if it goes even higher into October then insurance will just kick out more dollars that will cover paper losses.  Another words it is a true hedge until the end of October.  Not sure if I am explaining it right.  Maybe clear as mud right! 

[Palouser]

I guess I'm having trouble with the idea a top is likely to be in or known when the extent of the damage to the corn crop isn't finally realized and the droght continues on a widespread basis. Maybe it rained just before I got up and I didn't catch it. 

Some of the serious speculation as to where this crop actually is in terms of a national yield and a final production tally are getting quite scary. It matters whether it is 11 or 9 billion on corn. A lot.

[Jim Meade / Iowa City]

The effect of drought on grain production and livestock inventories is starting to hit the national popular news media.  Some of the info is wrong, but what is new?  🙂

[rayjenkins]

Silverwheaton.....you are looking at the situation correctly......as long as you can reasonably quantify the shortfall between your crop insurance coverage and what you may actually produce, you can start making plans for how to market those "crop insurance bushels"......

for me, it is the difference in being in control of the process of pricing those lost bushels, or waiting to accept the October average...if it were me, I would want to be in control......

[roarintiger1]

Ray,  What do you think the chances are that the highs come after the combines roll this fall?

[Silverwheaton]

Can someone tell why protecting the harvest price is not a hot topic on these boards.