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| Coming up to a harvest low eventually would indicate prices would recover at some point. What would be wrong with buying a cheap call - May 15 $4 call is under 6 cents and selling if the basis appears acceptable (or much better than it's going to get).
I would think a rally towards COP (around $4) would be somewhat natural since new sales would tend to be slow. Just because we have a lot doesn't mean it's sold. There are presales to come in this fall, but it sounds like they are generally much smaller than in the past. This would put my cheap call right in the money and adding value pretty close to 1 for 1. Of course just because it might make sense doesn't mean it will happen.
I still think big money wants to mess with our market and fundamentals of big crops don't necessarily scare them away. There is a chance for a recovery. To me this is a way to pick up 30 to 50 cents if funds decide to run the price back up some. If it doesn't recover much I'm only out 6 cents and I may have received a better sales price and potentially basis than later.
This would be a strategy for bushels I don't have sold and don't plan on storing on farm especially if elevator storage prices go up. | |
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Sell soon and buy back "on paper"
