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Hedge to arrive
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Cole Sibley
Posted 11/27/2012 12:14 (#2719570 - in reply to #2719396)
Subject: Re: Hedge to arrive



Perhaps this needs its own thread, but here goes. HTA's are making me nervous right now (probably because of my own ignorance). What happens to your basis if the price explodes? Here, if (board) price blows up, basis usually goes to pieces, so the HTA becomes a bad trap in that situation. I know (and give a lot of weight to) guys like RayJ have said that this year, basis may do all the heavy lifting, but I'm just curious as to others thoughts? What happens if corn starts to get real short (and wheat crop continues to deteriorate), basis will no longer be doing the work, the board will, correct?

Hypothetical: If you expect basis to do the work (and not price), why wouldn't you just sit tight and wait for it to work? Honestly these are just thoughts on my mind, and not marketing advice. Things are definately volatile right now, and it is hard to guess if things are going up down or sideways.

My opinion only, take it for what its worth: I think big players have been trying to shake loose some bushels (with fear tactics) and are succeeding, meaning bushels are going to get shorter as we move ahead. This price lull has also been a good opportunity (perhaps) for actual end users and demand. Good luck to all.
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