Gary Edwards Anamosa, Iowa | I have not been able to find any evidence of hedging putting a floor in the cattle market. I assume this is because of the volatile upward movement in the market. Last night I did some number crunching on Garvo's $11.00 bean puts which is in a more seasonal marketing trend. It appears he has set a floor not at $11.00, but a respectable average of $10.50. Keep in mind this floor is like the floor in an old farmhouse, always slopping with the slope angle decreasing as it goes down. I still haven't been able to see how puts can help in a rising market. This crazy market can make any put worthless after a week. Normally use calls on priced cattle to protect for upward market, but may have to rethink that, and use them on unpriced animals as well, but I think that is speculating, not hedging and does not protect the price. |