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I'll take the bashing by predicting we are on our way to a 180+ yield
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Tileman2
Posted 6/29/2020 09:29 (#8343114 - in reply to #8342508)
Subject: RE: I'll take the bashing by predicting we are on our way to a 180+ yield


NW IN
IMHO...sell the cash that makes you comfortable after working COP to the price offered (generally earlier in the growing year...this year that would have been Jan/Feb).

Either protect with puts on the balance of a "normal" crop for you or hedge it in futures to have the flexibility to enter/exit the hedge and not be forced to deliver cash.

For example...widely variable ground...maybe sell 40-50 bpa in your favored cash market. Keep in back of mind you have to deliver the physical. If your APH is 160 bpa, but you know it could be 200 with good weather or 90 with bad weather, maybe buy puts on another 50 bpa and sell futures on another 60-70 bpa, or more depending on your risk tolerance. You can exchange futures with most elevators now, or in a short crop, exit the hedge, no worries on physical delivery, and stay out of the futures rally till you know what you have and see what the market says.

If you don't want to carry hedges in your account, maybe call several elevators and see what they could offer. Some are more flexible than others, but it's worth calling and asking.

My point is that marketing isn't cheap or easy, but flexibility is important. Locking in physical delivery, "here", for me, is dangerous on un-irrigated crops. BTDT, got the tee-shirt.
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