In a van, down by the river. | Everyone's situation is different, of course, but I fear that this will be the third year in a row that producers in our area will find themselves "boxed in" holding too much old-crop in the face of a pretty decent new crop. That may be different than your situation. For customers who ask my opinion today, I'm telling them to consider selling at least something now, and have a target (or several targets) in the market for next Friday's report; if the report doesn't give us something good, then it's time to do something like selling 25% each week, etc.
Sadly, the last several years I've seen producers hang on tight through June with confidence of higher prices (I hear things like "there's still a lot of growing season," or "the crop's real bad out east"), only to watch them sell out in large chunks a dollar or more lower because they need space and don't want to pay any storage. Unfortunately, the market has yet to show us a "clearly profitable" price this summer, so we've bought considerably less during this rally than the last few years. I fear that means that we will see an even greater washout pre-harvest this year if we don't get rescued by some unforeseen bullish event.
As a basis trader, I would prefer to buy sooner (so I can earn some carry), and at higher flat price (because that's when there's maybe a little fat on the basis bone for me to trade...and my customers do better, too), so it doesn't do me any favors to see my producers boxed in. |
buying calls yet Rob?
