New Crop Market Strategies

[charliep]

Just curious what everyone is thinking. Lots of news and an equal
amount of volatility this past week. Perhaps a sign of things to come
this spring/summer.

What is everyone doing with new crop? Bulls or bears? Strategies?

My thoughts are this is a year that options have a fit. Buy puts on
rallies. For priced new crop (or an insurance policy that will provide
discipline to sign a deferred delivery contract/fixed price contract
later on a rally), buy calls on dips.

Options have a better fit if you are nervous about the production side
of the equation and don't want to tie yourself into a delivery
commitment. Not all crops have an options alternative but corn may
be a good weather lottery ticket.

Alberta farmers should be reviewing the Spring Price Endorsement
program over the next month or so. For non Alberta, AFSC offers
effectively a put that can be used as an add on to production
insurance. Has a premium cost.

[crusher]

Charlie,

When is Alberta crop insurance out?
We've sold some new crop board wheat, futures only. Nothing yet on canola, but might do some $12 off the combine. Charts are starting to look a little scary. If U.S.$ index holds at support and starts rising, I think grain prices will slide. A guy always likes to get the highs, but this time I might opt for very good instead. Never done options before, maybe I'll try a few if SPE doesn't look good. I hear US farmers' crop insurance looks pretty sexy for corn, beans might have a problem drawing swing acres.

[charliep]

Information is in the mail. Be ready for sticker shock (particularly on
production insurance). You start by looking at the increased coverage
levels. Premium up 25 % plus based on price.

Perhaps the highlight is you can put in a pretty floor revenue to manage
risk and keep your upside open. If price takes off this, you can blame me
for spending the money on premium. Nice to start the year with a
positive line (mother nature cooperating but that is a different issue).

March 31 will be the first USDA acreage estimate. Would watch this
carefully. My sense (others will disagree) is the pendelum swung to
soybeans on flexible acres this past. Will need to follow the corn soybean
price ratio carefully over the next 6 weeks.

[rainman]

going to hold tight on any decisions until we know if
we can get anything in the ground. Like to buy some
puts, but will be angered if I buy puts and don't even
get anything seeded.

[rainman]

going to hold tight on any decisions until we know if
we can get anything in the ground. Like to buy some
puts, but will be angered if I buy puts and don't even
get anything seeded.

[charliep]

Had the December corn futures highlighted to me. The inverse with old crop has decreased and is getting back to contract highs.

[URL="http://farms.com/FarmsPages/Markets/tabid/214/Default.aspx?&page=chart&sym=ZCZ11"]CBT Dec Corn[/URL]

For the heck of it, I will put up a December CBT soybean oil and crude oil chart. November canola as well.

<a href="http://farms.com/FarmsPages/Markets/tabid/214/Default.aspx?&page=chart&sym=ZLZ11"&g t;CBT Dec Beanoil</a>

<a href="http://farms.com/FarmsPages/Markets/tabid/214/Default.aspx?&page=chart&sym=CLZ11"&g t;dec crude oil</a>

<a href="http://farms.com/FarmsPages/Markets/tabid/214/Default.aspx?&page=chart&sym=RSX11"&g t;ICE Nov Canola</a>

[cottonpicken]

One more solid day and i eat crow on the bottom
call,eh Charlie,lol.

Im glad.

[charliep]

I wouldn't throw in the towel on your original thought yet. The monthly chart looks a lot like 2008. The issues of acreage, yields and ethanol demand still need to play out but.......

The but may start with corn prices are high - headed back to $7/bu.

[URL="http://farms.com/FarmsPages/Markets/tabid/214/Default.aspx?page=chart&sym=zc*0&domain=farms&stud ies=Volume;&cancelstudy=&a=M"]cbt corn monthly[/URL]

[cottonpicken]

This is what im hoping is setting up.But im not going to hold my breath.

http://www.investopedia.com/terms/c/cupandhandle.asp