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Frytown, Iowa | The more acres it beats for corn...
I don't know how many years this happens (haven't done the math and not going to either) where price falls so fast that it leaves inputs on cash rent ground higher board position than buying the board but I don't think it will last for the next 365 days...
50 cents per bu profit on 200 bu ground is $100/ac profit
3 contracts is basically an 80ac farm
3.90 + .50 is Cbot 4.40 do you think Cbot can hit 4.40? What's your price that you pull the trigger on 15' corn? Does it matter if Cbot beats your planting board position
I'm not saying this is a good idea, not sure I'm going to do it myself... Just saying if you run the numbers and think its better risk than some additional acres that this might fit your operation better...
Options eat up the margins. This would only work with a direct buy of dec 15. Your margin calls would be your cost... It is very similar risk to putting out corn acres this year.
Run your own numbers and see if this works for you. Perhaps it doesn't. Weigh the positives and negatives... Some I can think of are guaranteed bu. no disease, basis can't widen, localized weather can't hurt your bu., no physical labor.., downside is more risk on break evens, taking out possibilities of more yield that estimated, mental stress of margin calls and spec trade. You can run out of time instead of binning grain for carry and basis advantages...
Good luck just want to bring this possible deal to your attention no guarantees price is heading higher but those are the odds... Planting has 2 odds. Price and yield... | |
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The lower Cbot goes dec 15
