Pre pricing 2022 crop

[Guest]

sorry for a marketing thread
we haven't done any yet
we normally do about 15% of our bushels by volume (oats barley mostly)
haven't done any yet , what are others doing ?
local elevator guy said next to nothing done
would do some if an act of god appeared , even if it costs 10-15%
i know there are options, puts etc, but i am a pisspoor marketer , just want simple

[Hamloc]

sorry for a marketing thread
we haven't done any yet
we normally do about 15% of our bushels by volume (oats barley mostly)
haven't done any yet , what are others doing ?
local elevator guy said next to nothing done
would do some if an act of god appeared , even if it costs 10-15%

Definitely a conundrum. I don’t usually do more than 20% based on historical yields. What was weird last year is I didn’t pre book any CPS which I normally do. Yield sucked but it worked out on price. I can’t see that happening 2 years in a row but certainly is dry with very little snow here. Haven’t done any yet either.

[tubs]

have not done any down side risk is limited and is very dry around here. To much geopolitical risk as well.Wondering also what would happen if our government would put in price controls of somekind way to many unknowns for me at this time.

[Taiga]

Too much turmoil this year I think, I am going to wait. After the new bins I put up last year (which Never saw a kernel) I have storage for 100%. From the emails and texts I am getting it looks like they are going after the low hanging fruit.

[TASFarms]

South America is still cutting production numbers.
China buying lots of new crop beans
What is going to come out of the BlackSea?

$100 swing happened in canola twice in the last week.

[FarmJunkie]

Only did a couple loads of Canola just under 20. Too dry here to risk much more. Will get seed in the ground before anymore gets done.

[furrowtickler]

Will do some but not our normal 20% .
Got burned last year when that 20% turned into 80% .

[Rareearth]

- Sell the futures (short them)
- saves you massive basis (buy out of the money calls as insurance)
- deliver when you want to who ever you want
- be ready to deposit $ to margin account if futures continue to run higher
- could buy out of the money calls to protect your hedge/position

- this maximizes your returns vs buying puts ( floor price is futures price )

I haven’t checked the current futures or options prices yet


My short version how to, ( talk is cheap).

[wheatking16]

- Sell the futures (short them)
- saves you massive basis (buy out of the money calls as insurance)
- deliver when you want to who ever you want
- be ready to deposit $ to margin account if futures continue to run higher
- could buy out of the money calls to protect your hedge/position

- this maximizes your returns vs buying puts ( floor price is futures price )

I haven’t checked the current futures or options prices yet


My short version how to, ( talk is cheap).

Do I understand correctly that you suggest shorting the futures?

[Rareearth]

Yes, not May

Nov 22. or Jan 23. ( cover with close but out of the money calls) be ready to supplement account(margin calls)

Basis levels $2 bushel plus crush margins fffffffffffffff......

Do you think price discovery and futures, delivery threats are functional?
(Hint - no, or we wouldn't have $2.00 bushel basis levels when futures for closest delivery month are highest + crush $2.00 bushel = $4.00 bushel the crushers are making ffffffffffff.....

More than a lot of farmers make to grow the crop and take all cash flow risks, weather risks etc
Then extract max margins on delivery shortfalls fffffffffff.......

Ps i subscribe, thank you for your insights

[TOM4CWB]

Yes, not May

Nov 22. or Jan 23. ( cover with close but out of the money calls) be ready to supplement account(margin calls)

Basis levels $2 bushel plus crush margins fffffffffffffff......

Do you think price discovery and futures, delivery threats are functional?
(Hint - no, or we wouldn't have $2.00 bushel basis levels when futures for closest delivery month are highest + crush $2.00 bushel = $4.00 bushel the crushers are making ffffffffffff.....

More than a lot of farmers make to grow the crop and take all cash flow risks, weather risks etc
Then extract max margins on delivery shortfalls fffffffffff.......

Ps i subscribe, thank you for your insights

Can buy a $800/t Nov22 put for $30/t... nice base with low insurance cost...4% isn't bad at all.

Now for Nov23... that is a bear of a different growl... as no options available...

[jdg364]

Not sure if you mean selling 2022 crop or 2023 crop? We’ve done some 2022 crop for cash flow and bin space, hopefully we will still need our Bagger but doubtful.

Nothing for 2023 but Looking at the nov23, futures 792 - basis(25)= $17.40 which is a decent place to start.

I’m to the age where I don’t like buying green bananas let alone pricing two crop years out.

[Rareearth]

Current futures Nov 22 canola $886 / 44.09= $20.09 bushel
- thats the best true floor price a farmer can lock in for new crop nov.

800 puts = $30 (put cost) + $86 ( current futures 886 - put strike 800) = futures need to drop $116 dollars ton to break even from current futures price

800-116 = $684 / 44.09 = $15.51

$20.09 - $15.51 = difference of $ 4.58 bushel from current futures price is not cheap

Not sure if my logic is right, just trying to figuring out risks/opportunities my self



25 dollar nov basis is reasonable( to good),
- even with a delivery contract ,delivery timing often is during the nicest harvest weather ( when harvesting wheat etc)
- terminal is full
- not taking canola
- no train ( i predict this to be a major issue this coming year - trains prioritizing oil to USA)
- price spot is much higher than contract price 😊

[Rareearth]

Yes your right, but current futures are at $886

So 886 - 800 =86. Your still out of the money $86 dollars

[Guest]

sorry all , i was talking about the 2022 crop , not 2023
i fixed it on title
wonder what chuck is doing , he hasn't replied , lol