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cropsey, il 61731 | Historically we are always long, always a bull when it comes to marketing (or farming in general). We get set into patterns like the last few years of selling later. My pattern, previously quite successful, is to have plenty forward priced/sold (I have about 20-25% sold this year - low for me - rats) and I found it very hard to shift to what might be the 'new paradigm for crop sales timing'.
The question some of us ask ourselves is 'why didn't I short the heck of the market' since we all new this day would come and even a wildly out of the money really cheap put would have made money. I thought about this some and I think anyone farming 20 years tends to be slow to react to changes in the market behavior. This is especially true when for most of those years volatility was measured in cents or a fraction of that.
So if we consider that large managed money will be a player in our market*, volatility will be present and represent an opportunity. The market always overdoes things and with the additional money around, the 'overdo' is significant. Going forward I think I'm going to have to be willing to look at the bear side of the market with as much interest as the bull side. Shorting beans back at $12 a few months ago looks like a great idea from today's perspective and I think there will be more of this in the future (maybe even now?).
Maybe I'm just stating the obvious, but if there is money to be made, maybe trying a small position in anticipation of price swinging wildly every year becomes just standard practice. If Jon keeps posting reality, we can at least see whats happening fundamentally and consider how it will be an influence on trend. Sounds like a roller coaster, but it might work.
*Even if we go to a more business friendly administration in the future, there is so much to 'undo' that funds, etc will still be looking for places to invest for quite awhile - I see these 'opportunities' being around for a while.
I'll let you guys know if this works in about 5 years - a freebie from 20/20 hindsight marketing. | |
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"New" ideas for farmers
