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NEIAAG
Posted 7/4/2020 18:44 (#8354078 - in reply to #8353225)
Subject: RE: JP


JC STONE - 7/4/2020 10:14

Impossible to do it today unless you sold earlier over 4 bucks and kept rolling and selling the carry for 5 years ,that's if you didn't get caught in an inversion or if you doubled up sales last year on the 4.75 high and rolled forward .


Hi JC and Sassy. I will address both your questions here. It was absolutely possible and it's a matter of record about how it was done. It's a whole lot easier to make 5 out of 4 and change than 2 and change. If you go back and look at all the posts in January of last year I laid out exactly what my concerns were and that I had sold two years crop then. I expressed concerns that we were going to test 3.35 and if it did not hold, it would get mighty ugly so I decided to play defense and set floors on my crops then. I also plainly stated that if 3.35 held, I knew that I would need to reown both years crops upon a successful test. It was of course followed by cat calls,
you're a fool...yadda yadda yada. So simply making those sales at around 4.05 and 4.15 gave you great floors to work with. Then, a roll was performed on the test of 3.35 that "wasn't going to happen " at .32 cents. 19 crop now sitting in July HTAs at 4.37. Then as the plan was laid out I renowned both years in its entirety. The market rallied from the 3.40's to 4.70's leaving more than enough room for enough appreciation to easy achieve 5 dollars net in your pocket even with than a less than stellar exit on my part. This years initial hedges were a dime higher, but the roll was 7 less. In the end, with doing nothing more the 2020 crop in the field has a delivery price well over 5 on it, before basis and trucking which should still net 5 bucks. I did nothing special, no 'X' crops leverage etc, other than be thinking ahead and the possible outcomes and following the plan while protecting the bottom line. So it did happen, did not take 5 years of rolling and it wasn't difficult at all.

Take care

Edited by NEIAAG 7/4/2020 18:47
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