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Lots of talk about new crop sales...
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Andre54
Posted 2/23/2017 08:10 (#5857640 - in reply to #5857363)
Subject: RE: Lots of talk about new crop sales...


central ontario
Great question fry,I have already been very aggressive on new crop corn and beans for the 17 year production on a cash basis ,up here there are two equations that enter into the pricing matrix ,the Can$ being the second moving target.
This one item on it's own can change our basis ,the Can$ bottomed last year and so a decision was made to pass off risk to markets,the cash prices in corn were at near 16 summer highs for us going forward 16 months,when the extra ,will cover these sales with options when there is a pullback of real substance,the corn sale after 5 months is behind about .05,soy a little more,not worried about it one bit,there will be purchase opportunities for call options that will present themselves,but for cash sales it is not here yet.
If we were in the Feb 16 time frame and someone dangled today's soy price before you at the start of Mar16 coming up you would have been a happy seller to someone giving you an extra 1.70 per bushel on soy.
So I have not done any 18 production crops.
Passing on pricing risk to another party takes away from what could be upside possibility but does close the downside move whatever that may be.
Last fall I was taken in by the large production nos. the demand has been just outstanding for US exports and has maybe given producers some false beliefs that exports will remain at these elevated levels for years to come,we are competing in a global market for corn exports now, SA came up short on corn production last year of something like 800 mil bu which has been showing up on the at present export pace increase of being up like 70% above last year's pace.
After say a drought from 12 exports can drop to very low levels and still there is enough to go around.
Long term bearish stance towards global production nos.for grains.
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