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EC SoDak | It all depends when you’re hedging it, folks have different plans of attack.
I’ve been using the 2012-2014 pattern the last couple of years. To make it simpler, let’s talk 24 corn crop. Looking at the last big bull run, it paid to hedge early and often after the presumed bull peak(May of 22). So, if you remember the discussion on here mid August last year about Dec 24, I mentioned I was heavily hedged around that 5.20 range anticipating a big drop like 2014. I thought I was roughly 80% hedged for Dec 24 at that 5.20 range. The curveball was acres changed and how some of my silage was priced changed this past winter as well, so I went from 80% hedged to roughly 35-40% hedged for corn. So, new plan. The new plan was to hedge some this mid and late winter and then make a push again late April through around July 1 (as mentioned on here). If the crop looked good and nationally looked good, hedge some more. Heck, I set some floors yesterday again before the report to get some more done if it all fell out of bed. The corn didn’t hit, but the beans did for Nov 24 and Nov 25.
Now, what you’re probably most interested in are the more typical years. In those years, you typically hedge the current year and next years crop at the same time, but the percentages are different. As I said above, in the current year (short of drought or flood) I like to be 80%ish hedged by a week into July and around 20-30% hedged for the next year (think 2014-2020 markets). The bulk of those hedges are between May and June. If you look at a chart, those tend to be the most statistically advantageous times to hedge a crop.
It’s not fool proof though, there are years it can kick you in the teeth. But it tends to work 8/10 years, more if you know when to take a loss but lift and re-establish, but that is more tricky.
It’s kind of hard to chat about it all via here on a phone. You, and anyone else, feel free to email and we can chat that way or chat via phone as well. It can be kind of confusing and I’m a guy who likes to have a whiteboard and marker. Lol
Edited by SoDak Farms 8/13/2024 22:40
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So what happened to all this prevent plant?
