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| Jon -
Good for you to point out the downside on this issue. Clearly, there are risks that should be disclosed and you did a great job pointing that out.
A couple of more items on this issue:
1. We purchase heavier insurance. 80% to 85% RP protection to hide behind depending on the year. Hail insurance, too. We live in a hail alley and that has paid off big for us.
2. I wonder if your basis fluctuates more b/c you are not in the heart of the corn belt like we are. See below for the link on maximum and minimum historical corn basis in Iowa since 2012, The very highest one on there is .68. That may of cost a buck on one bad year, but that would have maxed it out. Playing the seasonals has much more upside for us b/c right now we are sitting on $9.40 cash Soybeans and $3.75 cash Corn. The highest cash Soybeans I can remember this year was about $10. Today they are around $8. The high cash Corn was about $4, Today they are around $3.30. Other years are different some, but not too far off.
https://www.extension.iastate.edu/agdm/crops/pdf/a2-41.pdf
Edited by Iowegian 10/15/2018 21:39
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Help me understand “futures market”
