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| Ughhhh spreads make me lose more sleep at night than production. I'm always trying to outsmart them. I'll let you know when I have it figured for sure.... but spreads are like basis. You may be able to pick up pennies, but you need to make dollars. Make that first sale, December for corn and November for soybeans (I don't know your harvest window but if you're doing a Sep, you're planning on harvesting in August and are not looking at any carry.... if there's carry especially just get it in the Dec/Nov and be done with it). Once you have your first sale on, just roll when it seems profitable. In corn, late August is almost always a good time to roll. I would roll out to your expected delivery window and be done with it, personally. Gotta remember whether futures or HTA, you have some fees. If you're not outperforming those fees, just hedge forward to begin with.
Do you know what your cost to carry is? Interest per bushel? How much basis appreciation do you expect in your area? That's where you should start. It's a lot like regular marketing, if you can't tell me what your breakeven is, how do you know if you're selling for a profit?
The pros are the ones to talk to on spreads, full service marketing firms, etc. I know of one that just trades spreads in a spreads account based on seasonality. Do what works, I guess. | |
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Help me with spreads please!
