Death comes to us all. Life's but a walking shadow | Last week's Commitment of Traders shows commercial short hedges for new crop futures only and new crop futures & options combined were 105,000 and 129,595 respectively. Assuming that commercial short hedges is a good proxy for producer hedging and it has been shown to be very good measure, a maximum of 648 million bushels out of a potential crop of 14.2 billion bushel has been hedged or 4.6%. Now maybe some producers hedge a significant portion of their new crop before planting but the evidence suggests strongly that most (almost all) don't.
Note: Commercial short hedges last week were only about 2/3 of last year's at the same time. Historically by the end of planting in June only about 200,000 contracts or 1.0 billion bushel will be hedged. Despite all the talk about forward contracting, HTA's and whatever there's little evidence that producers pre-price much of their crop and even less at current prices.
Edited by 1234 4/1/2016 05:48
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