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Southeast MN | The posts here on marketing service's performance and forum talk about the dollar got me to thinking....which hurts sometimes. Anyway, my question is this. When in the past have we gone into a bull market for commodities while the dollar has been losing value? What strategies worked or flopped?
I think if I knew this I could make better sales. Lock in my costs with the current dollar value and pay it back next year at a lower dollar price, but earning more dollars per bushel. Does that make sense or maybe I'm not asking that right? Maybe the Brazilians have always been operating like that. I see the cost of operating loans going up in dollar size and interest rates and don't intend to add any new longer term debt.
I have no on farm storage and have been selling 50-80% ahead of harvest and that strategy has allowed me to stay in the game. But I've left a lot of money on the table with the 06 crop and again with this years, booking "too early" even though it's been a decent price. I tried using some options last year, and they helped me sleep a little easier but basically turned out to be "tuition" for the learning experience. Using storage could help, but one still has to decide when to pull the trigger.
HTA used to work well here too, but the terminals have figured out how to beat me up on basis since Katrina hit but that's another whole topic.
That's the end of my rambling, thanks for any ideas.
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Weakening dollar and forward contracts
