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Fontanelle, IA | Don’t feed out cattle so you are going to get some un educated advice here.
If you are feeding your own home grown corn from fall 2021, then you probably need to calculate your projected cog on a crop insurance basis with APH, % coverage, maybe an SCO/ECO to add revenue (bushels protection). Those calves have options right now- you don’t have to lock in any gain costs until you bring them into the lot and feed new crop 2021 corn? You could sell them as 8 wts or 9 wts in summer?
Now, doesn’t seem to be the seasonal low for new crop corn prices.... and this corn market is streaking like a fat gutted super bowl streaker with Chinese demand anticipation and drought worries right now. I would be selective in my call purchases in the next 60-75 days until informa and everyone else comes out with 94-95 million acres of corn and fast planting pace prognostications. With Buffett’s railroad charging exorbitant rates for hauling corn in order to displace oil tankers and potentially an early frost that causes you ND guys light test weight corn, I hope I am wrong in thinking that your basis won’t get out of hand.
Focus on raising as much corn as you can from your own farm ground. Buy your call at your $5 worse case cog when time value is less ? @ Probably at the 50% planted mark? But, you probably would want to offset some of the fed cattle risk if you buy some corn on the board with calls?
I don’t feed cattle- yet! :-) | |
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