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| And why do pork prices need to skyrocket just because corn rallies? Just yesterday, while corn was up 15, hogs were down the limit. Hogs will manage higher feed costs through the price of feeders at first, then when there’s no more blood to be squeezed there, that’s when they really put the brakes on what they will pay for corn. Same for cattle. Sow units and cow calf operators could get quite a gut check if prices do not rise significantly. But they have their own supply issues to deal with, and I don’t see why the meats would dramatically increase in value just so the corn farmer doesn’t have to squeal about the ultra wide basis levels because nobody can afford his corn. An input is only worth what somebody is willing to pay cash for it, and it appears to me at current prices in all the meats and Ethanol, we’re prolly already there. There’s prolly a good share of puking already going on. I will NEVER advise or encourage anybody to speculate. That being said, about the only way I see for a corn producer to capture the lions share of any further rally if it occurs at all is through going long the futures. Sure calls could too, but premiums water down the desired effect quite a bit. This is because I see where we’re at in cash bids being about all end users can stomach at the moment. This is a scenario I see as having a very high likelihood of occurrence. I have a personal rule that I will not speculate. As a pretty aggressive trader when I was just 23 years old, I got burned badly in a black swan event, (didn’t actually lose money, but watched my account equity vanish in a matter of days)and told myself then and there I need to figure out how to make money without gambling in the futures market. And while I’ve been tempted many times, a couple weeks especially, I’m gonna stand my ground. Again, I WOULD encourage producers to be satisfied with the cash bids available, and not risk getting burned in the futures market with Texas hedges.
Edited by Boone & Crockett 5/25/2019 05:54
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Rumors of increased PP payments
