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Using Options vs Min Price Contract
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zmracing
Posted 5/20/2016 08:09 (#5311340 - in reply to #5310918)
Subject: RE: Using Options vs Min Price Contract


west central MN

I think if you start using futures and options you will learn a lot more about your marketing and it gives you so much more flexibility when you do make your cash sales. You can  make a lot of small hedges and when it comes to locking in a basis you can offer a buyer a lot more bushels and sometimes get a better basis and discount schedule because of the volume. It also gives you a lot more flexibility as to the acres you are going to plant. It is not too hard to hedge corn early and then switch to beans if they come out with an important report in March. You can just buy back your corn hedge and hedge beans if the market is telling you to do that. Margin calls can be tough but it might make you look at different options like protecting yourself with calls.

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