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| Well, next year is an election year. How about proposals limting the amount of corn used for ethanol, in response to consumers concern about rising food prices? How about a livestock disease outbreak in the U.S. that kills our exports and drives down livestock prices and numbers. How about bumper wheat and coarse grain crops world wide next year? What would be the effect of a major terrorist attack? What about a sudden break in oil prices when the U.S. announces drilling in Anwar? Or a major coal gassification initiative? Or a major break through in cellulosic ethanol, allowing us to use forestry byproducts instead of corn and other grains? What about major consumer resistance to ethanol? ( I talked to a very knowledgable gentleman this morning who was concerned ethanol was going to hurt his car.) What about the uncoupling of the Yuan and a resurgence of the Dollar? What about one or two or three major hedge funds going under due to Sub-Prime paper and exiting the commodities markets? What about a collapse or the U.S. economy brought on by a major terrorist attack? Or a mojor closing of U.S. ports brought on by a strike or other problems? Remember what internal Basis did after Katrina?
I don't think you can predict what will kill a major Bull market, but, it seems like they all do die, eventually, and usually rather spectacularly.
Guess what I'm trying to say is that there is risk, at least in my view, and the higher input costs go the higher the risk is. Most will have their input costs locked in shortly, if they already aren't, then it becomes a matter of picking a price and going with it. Maybe buy some out of the money puts so in the case of a further rally you aren't totally locked out. That's my personal plan. Anything I forward sell will be CASH, not HTA, and will be backed by an option. | |
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Give me your opinions....Re:'08 corn contracts
