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NE CO | I've got most of my 07 wheat hedged on the board in March futures at around $7. It is tempting to deliver the wheat at what I think will be high price, hold the hedge and let prices fall to make back what I "lost" by selling too soon. The problem with that strategy is I could be wrong and watch futures continue to climb and lose even more margin money. So far the market hasn't done what I expected, and I suspect I could be wrong again. Best to stay with the current plan and lift the hedges when I deliver the wheat. Just be sure that you realize that you are speculating and not hedging when you enter a futures trade after you have already contracted the grain. Also remember that the futures price is the consensus of buyers and sellers today regarding where the prices will be. | |
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