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EC SoDak | Historically, 8 out of 10 years it pays to hedge ahead of time during historical advantageous times, roll to the next spring or summer to collect carry, and negotiate a better basis vs harvest. Yes, there are years you get hammered, but you tend to average that out mostly on the backend of massive bull runs like we are experiencing lately.
I’m trying something new this year, allowing a marketing group to manage a percentage of my bushels so I can compare and contrast their plan vs mine. They’ll use hedges to enter and exit positions roughly 2-3 times in the crop to capitalize both the short and long positions the market provides. Versus my plan: I hedge (short) mostly during the run up the year before (for instance, I have 5.20 or so Dec 24 hedges in place from last summer), then during April-June, then more if it looks like I have a good crop before the Aug report (kinda depends how the crop looks nationally though), roll to collect carry, then haul to the plant as basis dictates.
They charge $50 a month no matter how many bushels you have them manage. Beyond that, you still have to pay your typical broker fees for contracts whether you manage the bushels or they do.
Let me know if you have any more questions. Good luck. | |
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ROI for a new grain bin of your are a dummy like me!
