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$ smoking - grains and beans up? NT
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John Burns
Posted 1/29/2016 12:04 (#5072531 - in reply to #5072494)
Subject: RE: $ smoking - grains and beans up? NT



Pittsburg, Kansas
redoak - 1/29/2016 10:44

John Burns - 1/29/2016 12:05

Several years ago, used to use futures to price grain ahead a fair amount. Kind of swore off of using them
John


John , interesting too you are a flat pricer ,, after fooling some with futures in early '80's and then options later it didn't take much in margin calls for me to decide that risk is too high for me too feel comfortable with . Having wheat priced on futures and no basis locked in and $CAD getting stronger in late '07 early '08 sealed the deal that I want to be flat,cash pricer too. Also seen more guys lose a farm trading futures than buying another one.


I was not smart enough to quit after I lost (what at that time was) a lot of money. I kept on using them on and off for probably 20 years. Went to the marketing meetings, in a marketing club for a while, yada yada yada. Had a couple of times I shot out the lights with profit. That may have been at least part (the biggest part was when Corzine lost other peoples account money) of why I decided to quit(quit while I am ahead). I don't know if I am ahead or behind overall, but I'm sure if I figured interest in on my "marketing investment" (read losses) I would likely be behind. And if I kept at it, odds were I would end up on the loosing end.

I can see using futures and options as management tools to hedge risk. Like insurance is used to hedge risk. But I also see it as just like anything else where you lay risk off to someone else, they don't want to accept the monkey off your back for free. It costs to lay risk off, not pays.

At least that is the way this dumb dirt farmer sees it.

John

Edited by John Burns 1/29/2016 12:05
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