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| agreed. I never understood the philosophy of simply using my CI to cover my downside price risk. The indemity just brings me back to the guarentee. On 160 BPA APH with 85% CRC at $3.99 you really have $3.40 "sort of" locked in so you have almost 60 cents downside price risk. Yes you need alot of bushels to have a high enough yield in order to wipe out the indemnity but simply using the CRC or even GRIP as my "put option" never made alot of sense with me. At $2.60 CBOT at fall could equate to $2.00 cash corn in some markets at harvest so even if I have 180 BPA corn and do nothing but wait and have to move corn at harvest I end up with $360 gross.
Now with a better yield looming I will look at getting more puts bought even at current levels. If we rally for some reason that is ok too since the put is a substitute sale. | |
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2.60 corn and 7.20 beans
