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| Let me qualify- I come from the school where hedging should be transacted in futures & with a lender's understanding. They are out there & if I did not have such a lender, I would find one. I also believe in writing calls, not paying a premium. I do not believe in defensive strategies unless there are exceptional circumstances. All of these other programs, which are okay, but they were designed for producers not wishing to hedge through futures and for those producers who lacked a banker understanding the markets. There is a marketing penalty associated with these programs. Once hedged & strictly follow the book, I would then use calls to protect myself as those situations develop. Goes along with my long time view that grain storage should be owned by the producer & not by the people to whom you sell your product. Be flexible, always. I have designed a lot of producer strategies...would you rather be using part of your potential marketing profit to pay for the local grain merchant? Or, the debt service on your own facilities?
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Attempt Rational In an Irrational Period
