Still Bullish Barley

[rain]

How many think the run on barley for the year is over?

The only things that could change this is the PRO for Wheat going crazy, or a corn tarriff.

Side not the initial price for Standard Select after all deductions make $3.25 FOB Calgary region. The will likely get some borderline barley being offered to the board again I think.

Any other thoughts?

[charliep]

I am unsure how feed grain prices will proceed (20 years in this business have taught me never to be bullish or bearish but rather look for opportunities) so I have to come back to a solid marketing plan that is getting the bills paid on time (I would have cash flow covered by sales well into the winter) and selling product at profitable values. A balance in a marketing program with sales of all crops at current values but some left in the bin to take advantage of spring/summer rallies. My priority crops would be feed grains and pulses with less sales of oilseeds at current values.

It is also a year a person can sell crop early to pay and use replacement strategies over the winter (I still suggest being very patient). Demand side through the winter and weather next spring will be the real wild cards. Planning, execution and discipline will be keys to success.

Others thoughts.

[charliep]

Rain

Any thoughts on corn/barley strategies? If the theory is to sell expensive/buy cheap, a potential alternative would be to sell cash feed barley and replace with either CBOT corn futures or buy corn calls. The real point is that any feed barley price improvement will have to be supported by higher US corn prices.

Thoughts on this strategy/timing?

[rain]

Selling the barley and buying a corn call would be good, but I think any movement up in corn will be friendlier to wheat than barley.

Buy July 250 corn calls, or even selling July 220 corn puts may work as well.

What do you think?

[charliep]

I agree with the strategies (I would be patient on buying calls as the short term looks very flat to me until the US corn crop is 100 % in the bin - I want to buy call options as cheap as possible).

What are peoples comfort levels with understanding options? Is this something we should be going over in more detail? This is particularly the case on the sell side (or writing an option if you like). Do others understand the risk reward analysis needed?