Grain price drop

[farmboy44]

Grain Co's don't speculate on the upside and downs in the commodity markets.

They hedge as quick as possible.

They take margin on basis and upgrade between the praries and the boat.

IMHO.

Maybe Larry or some of the grain Co employees may comment?

Well this is just blatantly false.

Sure they hedge futures on canola and wheat right away, but there is no barley futures to hedge against.

It’s literally impossible for them to not speculate on a position. When They sell a 70000mt boat, they own either less or more than that prior To making the sale.

The misinformation on here is astounding

[AlbertaFarmer5]

Well this is just blatantly false.

There is no barley futures to hedge against. Even on wheat, canola etc they can hedge the futures portion but they sell based on a basis value.

It’s literally impossible for them to not speculate on a position. When They sell a 70000mt boat, they own either less or more than that prior To making the sale.

The misinformation on here is astounding

I stand corrected.

But do they ever purposefully speculate? Is that ever part of the business model, to try make money on unhedged grain, or just a necessary evil to make the logistics work out?

[farmboy44]

I stand corrected.

But do they ever purposefully speculate? Is that ever part of the business model, to try make money on unhedged grain, or just a necessary evil to make the logistics work out?

Yes. It is an open market. They purposefully speculate on any portion of their position they want to. For risk management purposes I imagine they don’t take too substantial of positions, but there are times they do.