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Jesup, IA | Agreed Maize. The OP is a bit confusing to me as it seems they have three goals:
1. "how do I retain carry in the market if I'm hedged"
2 "....and only waiting for basis increase...."
3. "and want to sell my short positions because the market has reached a bottom?"
I'm trying to learn something here. It seems with goals 1 & 2, I think the OP is speaking to having the futures hedge rolled out to July and waiting for the basis to narrow (either by cash moving up or futures working down, same diff?). But it seems you can get the improvement now by simply setting flat pricing for the summer months.
Of course, goal three is addressed with a futures repurchase. Although you could buy a call and have less margin exposure.
Or maybe accomplish the three goals by another hybrid method? Like leave the futures hedge in place and buy calls? Let the basis narrow, but if futures move higher, let the call offset movement against you in the futures? Leaving you net long but realizing the basis improvement?
What would they teach you at White Commercial, or is it forbidden to share this secret from the Grain Merchandisers Union? | |
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Corn merchandising question
