South Dakota | FA11 - 9/22/2022 15:30
at what price corn and beans would you tell any and everybody sweep the bins, sell of all grain from this crop and the next
For guys in my area; central and western SD…..there is no price where I would tell them to sell all of next years crop; because the production is too variable…..and its not like they can lock in a decent basis
Also your question is legitimate but at same token it’s not…..as it’s too generic…….
So I wouldn’t have a certain price……at least not the same price for everyone
I would say that in some areas a huge inverse in basis …..that is something that would cause me to sell out……….but it might and most likely would mean selling the higher price cash grain and re-owning the lower priced futures
I wouldn’t oppose guys putting a floor in on all of the bushels at a certain price…….but that is too generic of a question and the reality is that every farmer and every operation should have a different answer to that question
I know a guy that had 500,000 in a hedge account a few years ago….long futures…...this guy has staying power…..his goal was to get to a million bucks…….when he got there; he asked me what I thought……I said no way I would sell it……you have been holding it for this long…..and now you have a chance to really hit a home run…..this market has got tons of upside……I said don’t sell just because we got to your target……let the market give you a reason to sell
Before long it was at 2 million bucks…..he asked the same question…….and I just told him let the market tell you what to do……the trend is your friend
This guy sold the long futures and replaced with some long dated calls when the market gave him that reason but it was at a heck of a lot better of a price then what his goal was at……it was nearly 5 times his original goal……….he no longer has any downside risk other then his option premium
So there is NO level where i would say everyone should be sold out…….but for some we may already be at a level where they should be sold out…..for others it might be 8.00 corn……for others they might want to be 100% protected at 7.00 corn……
Grain Marketing is not a one size fits all……….never has been and never will be
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Hey Hick
