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| A couple thoughts....
1. Prepaying can be a vehicle to make money in the inverse way that carry makes you money. IE I buy fertilizer in July/August of the year before and store it until the next spring. I take the storage risk but "earn" the carry. Works out 9 years in 10, much like carrying grain. So I have already pre-bought my fertilizer for 2019 crops and paid for them. I'm guessing at a better price than spring delivery. Seed purchases are sorta the same way.
2. You can make a good sale and take the delivery on it now with a hedge account. I had a lot of corn hedged at 4.24 Dec last year, bought it back in August and moved it to HTAs with the elevator through the delivery time I wanted. Had around a .40/bushel profit that I withdrew from the account. Had made money selling correctly, rolled forward to capture the carry, had difference in the market in my pocket. Doesn't work every year, but has for the last 5 or so.... | |
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Prepay 2019 inputs?
