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Situation: What would you do?
If you had 100,000 bushels of actual corn that was hedged for July 08' and you wanted to try to attach an option to it, what would you do? After reading this initial post, it seems that many shorts feel that wheat is the most likely to fall back to reality. Does the report completely change this thinking, or will enough acres exist to bring us to a safe level? I was looking at Dec '08 wheat on the CBOT which traded in the mid to upper $6 range as recently as mid-Novemember. A $7 put is around .35 and will likely be slightly cheaper Monday morning or even days to follow.
Is wheat the most vulnerable and is it possible it could settle back in the $5 range as it did during most of 2007?
Option 2: Is it more likely that the positions with heavy longs (old-crop corn especially) are more likely to see a quicker fall if the thing does go south? Just trying to learn and figure this freight train out.
Thanks in advance.
Edited by Illinoisfan 1/12/2008 23:25
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Potential Chokees & Chokers
