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| There are lots of market participants--grouped primarily into 4 categories--those that produce commodities, those that consume commodities, those that are handlers or commercial participants, and speculators that take risk positions in the hope of making a profit. All 4 groups have as their objective profitability. Seldom are all 4 "happy". All 4 groups study fundamental issues (like the reports today) and all 4 of the groups attempt some form of technical market assessment.
For producers, like the majority of the participants on this site, the business of farming requires some form of planning. We all plan for the growing season,-getting the land base, the crop production plan, the financing, the labor plan. We are at risk for weather and so far have developed no path to fully take weather out of the risk equation.
We all would like to think that we will have a peice of news that allows us to hit the high of the price range. Probably does not happen too often. Some may even decide they are smarter than the market and decide to take a few risk positions in the market. Sometimes they work. The reallity of production agriculture is that we are always "long". Because of what we do, we always have more to sell. The rest of last years crop still in the bin; the crop we are preparing to plant; the crop that will be produced a year from this spring--it does not end so long as you are commited to the business.
We face a very serious time in the business plan. We have commited significantly to the process. Always easy to hear only the news that tends to favor higher prices--some even seem to go into a rage when people suggest lower prices might be coming. I encourage a small group of freinds who really do attempt to study what is or is not happening in the markets, to lock in portions of expected production along the path when profitability is available. Certainly glad we have made some sales. Today we can all say we wish we had made more sales, but if wishes were fishes we would all have some big ones, maybe.
I sense some big risk ahead for us all. Even todays prices can be very attractive if you don't have much of anything sold for next season or if you still have inventory from last year. With the acreage question now behind us and this time frame being a historically important turning time---??????
Hope you all have a great Easter celebration remembering the significance of the sacrifice. | |
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Reality of a business requires risk management-
