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| A lot of rhetoric out there about these prices.
I am a speculator, producers should not, more than they already have on costs & yields.
Producers do not let these markets pass you by; speculate some…but get some sold.
I remember at my first job in the grain business: think for a couple of years I recall 90 cents for 2YC at harvest. Problem in those days was either too wet when brought in, & moisture discounts would take that price down ….or, the fellows with the batch dryers would get careless & get it down to 9% or thereabouts with huge FM discounts….made some money blending & screening but it also tied up bin space.
Producers sold most of their corn in July-Sept as they finished their livestock program. Basis was very predictable, you just backed off in the summer to make your margins & were also full of CCC stored grain & always a real quality management chore.
Corn operating margins were 2 cents per bushel, 5 on beans. Thin, but was all competition would allow, but made some money. I was making a buck an hour, felt good about it..and believe it or not, built up a little nest egg, impossible today for a lot of folks, even at significantly better wages.
As things changed a bit, producers began to sell some inventory in the third week of June when the crop looked good.
Now you have marketing programs.
When these markets finally turn, there is the risk they will turn hard & you have to contend with limit down moves & protection.
No one knows how high this thing will go…no one. Except I have my personal rule, when you are winning—don’t fight it or get too cute. I never plan to hit the top anyway. Babe Ruth was a home run hitter but had a lousy batting average. The most important element in trading is the magnitude of the win, not the trading; view everything in terms of risk.
Two excellent posts this week: “after you sell, stay out of the elevator” & “can’t we just enjoy the moment.”
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Okay, younger fellows.
