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| Let me start by saying how much I enjoy the comments on this forum. I have learned a great deal and realize that I still have a long way to go. I farm in Canada where our logistics problems have become legendary. Basis levels have been beyond belief. (bad) In light of that I have taken some protection on new crop wheat by buyiing $7.30 puts a few weeks ago on about 15% of expected production. I financed those puts by selling Dec $8.00 calls. Premiums were a wash. Yesterday I complicated the issue by selling Dec $8 calls on another 15% of expected production for 36 cents/bu. The way I look at it I have increased my base futures price to $7.66/ bu if prices tank. If prices rally I will be short 30% of expected production at an average price of $8.18/bu including my call premium. I would appreciate any thoughts/critiques on this strategy. | |
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Let me run this by you....
