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SW MN and Gold Canyon AZ | I have seen it time and time again, to much storage gets lots of farmers in trouble keeping grain to long.If you don't beleive that statement look at the corn coming into elevators now, its junk!!!
Also farmers forget how much it costs to store grain. Selling the carry negates that but I notice many don't understand that concept.
I only have enough storage for 80% of my crop. I always sell some for fall delivery. I have some 4$ sold for oct del, that was sold LAST year. You will need $4.5 to beat that price till june of next year!!! Many will realize they have a big crop coming and then have to sell into a wide basis. Not me.
I look at cashflow, and sell ahead what I need to prepay next years crop and cash rents and land payments, I cover those for sure, then I spread out my deleiveries from dec thru may using carry if its there. I sell in 5 to 10% increments and am not scared to sell 2 yrs in advance. I am covered thru crop insurance. I don't always use cash. I have HTA's on some 2011 crop sold last week for dec deleivery and if the carry widens and basis narrows I will be way over 4$ cash. You can't make money on 4$ corn ???I also uses puts and calls. | |
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For those who swear by having old crop sold by July 4th?....
