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East Central South Dakota | I cannot believe the amount of farmers that have most of their 2012 crop in the bins and are buying paper because the market is wrong. $6.50 cash bid here today on corn. They could loose another dollar off of cash and a dollar on paper to net a whopping $4.50 cash. Makes me feel better about my early sales at 5 bucks.
I have no idea where the markets are heading, but i have said on here before----it is about money flow, not necesarily whats out your window. Think globally and watch the flow of money. The money could jump in tomorrow and we could go up 50 cents, who knows. Owning grain in bins and buying paper is risky double jeporady in my books.
In a farm magazine telling how you sell the same crop 4-5 times one day and having a farm sale the next---sound familiar. |
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Buxton ND | That is what i call a Texas hedge !! ! ! ! ! long in da bins,long on the board and or field. Those type of loss's the IRS tend to pick over with a fine tooth comb......... There is a little grey area if you are truly re-owning sold grain and can PROVE IT.....Like selling TODAY and RE-OWNING today
Buying beans at Nov lows was tempting this morning,,,but just "sat" of my hands
Edited by Sat 1/4/2013 14:02
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| best post of the year so far. Granted the year is young but still kuddo's.
If the guy writing the magazine article knew how to predict price, he would not be writing magazine articles..... |
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Buxton ND | Re-owning grain is something I've always had a problem with, If one feels strongly enough to re-own, then why sell it to start with ? I sold a lot closer to Labor Day then Christmas, was really tempted the first time we dropped under $14 and tempted again today but still didn't re-owning anything....
IMO re-owning grain started many years ago with minimum priced contract with some local elevators. Sell your grain,the local would happily buy you a call above the market and deduct its cost out of your check,most expired worthless. The local happy part was their commission company's sold the producer that dam call.......So they not only made money handling your grains,they made .10-.12 selling you that call............ It was a win win for them and a 80-90 % chance the producer got the shaft........... Yes .10-.12 used to get you a fair call or put, many years .20ish would get you a ATM option,those days are LONG GONE......
2008 was the last time I used buying puts as a hedge,,,I was well past the level of risk I was comfortable with and out of money for margin calls,so bought a few $5 calls that at the time were WAY OTM- out of the money. They worked quite well ! ! ! |
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Ontario's middle east | nt |
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Buxton ND | SO FAR this year,,,your money would be better spent going to your local bar and buying $1000.00 of pull tabs,,,,,,,,,,, INSTEAD of buying calls...................
At least there you can have some fun,have a few drinks and support your local Day Care or Fire Department and feel your loss's went to a good place ! ! ! ! ! |
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SW Iowa | Going into the '13 season with only 1/2 full bins, and questionable, unknown quality in them to boot (aflatoxin), and subsoil moisture 10 inches short, and you are wondering why everyone is holding onto grains? I believe corn can be explosive to the upside, especially if we plant in the dust. |
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| I understand guys holding corn if they had a short crop. Say they raised half their aph so they got paid the other half in insurance money at 7.5 and don't need the other half till next aug when they want to empty a bin. Theres a good chance we get a big weather scare and things go crazy sometime in 2013, but I'm thrilled I sold the rest of mine with an 8 in front of and had the ticket framed. 8 dollar corn does not come around often and may never again if we raise 2 or 3 big crops. Buying calls this time of year are for river boat gambling only. Sept calls always get pretty cheap when the crop goes in. |
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East Central South Dakota | Don't disagree with you. We are out of subsoil that pulled us through in 2012. My bins are full and when it drops low enough i am sure i will panic sell and justify my poor marketing skills with "all the tax i will save"----i just don't want to own paper too just because i think it should be higher, We should get a bounce. i have zero 2013 sold, hard to pull the 2013 trigger as dry as we are. If we all get stubborn and hold 2012 maybe basis will make up some ground for us. Still -.29 here on corn. |
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Near-north Ontario, French River | I don't think anyone is questioning holding crop in the bin. They are questions holding crop and going long on the CBOT either with Call options or a futures position. That's a Texas Hedge, and that's playing russian roulette. If you win you win big..if you lose you lose HUGE |
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Texas/New Mexico Stateline | What I want to know is why our fine state the Republic of Texas is associated with this foolish behavior? Go big or go home? Reckless wild Texans? Shouldn't it be called a Nevada Hedge? Atlantic City marketing? |
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eastern south central KS | I have always heard that the term Texas Hedge originated with Texas cattle feeders with cattle on feed who got bulled up and bought futures to add to their existing physical long. Perhaps someone can research this and either verify or refute my definition. |
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SW MO | sckansas - 1/4/2013 17:41
I have always heard that the term Texas Hedge originated with Texas cattle feeders with cattle on feed who got bulled up and bought futures to add to their existing physical long. Perhaps someone can research this and either verify or refute my definition.
This is precisely how I was told of the terms origination as well. |
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Texas/New Mexico Stateline | Makes a good story. I would also like to know if that is true. I can see it happening. |
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Texas Hedge ! !
