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NW IN | 1. Keep it simple to start.
2. Don't let your broker or the merchandiser dazzle you with "creative" contracts. If you don't understand all sides and potential outcomes of a trade...don't do it.
3. Know your production costs against a reasonable yield. If your APH on a farm is 160, don't plug 200 into your cost structure because you can't market your way out of a 40 bushel shortfall.
4. No two years are alike. We here on Market Talk will sometimes look for analog years, but no two years are the same. Ever. (comment above about selling beans in February, when you should "never" sell beans...again...no two years are identical)
5. Short crops have long tails. Basis values will normally be hot for a long time after a short crop.
6. Basis is a "here" thing. Your basis is different than my basis. Always will be.
7. Large crops/carryovers create futures carry (out months are worth more than nearby) and potentially poor basis in harvest. Study what the market tells you and learn to trust your instinct.
Maybe I'll add more as they come to my mind.
Good luck and there are several good posters on here that will share good thoughts and data. Don't fall into the Fundamental vs. Technical fights. They both have there place and time. You'll learn a lot along the way. All lessons learned well, will most likely be learned hard. | |
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Marketing and Basis, teach me..
