sw ontario | LongKC - 1/30/2016 17:57
Redoak I'm trying to make sure I understand: you raise hogs, soy, and wheat. You hedge your wheat and soy production on the board with short positions, but you do not hedge the hogs you produce with short hog positions, is that what you are saying?
You are probably typical of feeders here, who feed animals and produce grain. That complicates my original question which is, say you require X amount of feed for purchase. What percent of X is shorted on the board in advance (I'm not sure how to handle the fact that you produce the feed also).
Yes and we pretty much raise all our corn needs , say in '06 we were 100% hedged on feed , today 0 as soy meal is historically near the top of its trading range ........be it sales or inputs unless they are at or near historical highs or lows we just go hand to mouth for inputs and cash sales . We do sell hogs wekly and purchase feed inputs weekly also. Maizeing or Ray will no a lot more but a merchandiser with ADM told me they always prefer to be a little on the short side on soy trade/meal/oil. Our hedges now are forward contract sales,not o CBOT. We figure buy/sell weekly our average long term is as good as trying to hedge both feed and hog production . CBOT hedges don't always work well as basis can screw up your actual cash price. |
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