|
Red River Valley | For a while I have been preaching to sell the big carries in wheat he is an example of how it worked for me so far
A while back I sold July 12 wheat At 6.75 per bushel at the time Sept. 11 wheat was at $5.65 giving me a $1.10 carry for 9 months well since then we have witnessed a great price runup so today I reversed this and I bought back my July 12 for $7.50 and sold a sept. 11 for $7.60 I have incured a loss of .75 per bushel on my july 12 but I now have a Sept. 11 new crop sale of $7.60 leaving me a true sale at $6.85 still below what I would have had with no sale at all but a very profitable sale non the less. Now when this emotional market gets done here I would look for the carry to go back out to around $1.00 and at that time I will roll this hedged sale back out recuping the carry and moving my price up to $7.85 per bushel for July 12 from there I will move it from CBOT to MGEX at what will become something around .30 premium DNS then roll to dec. 12 for another prbably .25 giving me $8.40 for dec. 12 wheat.
Would it have been better to not have sold until today yes but using the carry and roll the market will give you is also important to know.
| |
|
A little example of how selling carry works
