Protein spreads

[$short]

I agree with what ado is saying. Why commit to a
contract when you don't know your quality?
Protein levels? Specs such as FN or HVK?

Too many variables that aren't known.

If you like the prices short the futures or buy
some puts. It's the same thing. Nothing
complicated about this at all.

[bgmb]

Put your wheat in the bin then make a deal when
you know what you have

[oliver990]

have been waiting my whole farming career to have this debate. our marketing agency sheltered us from the worries of protein, for a cost of $2/bus. the foward HRS we have sold we picked target price with reference grade of #2 13px. i found willingness to negotiate price with lower ref grade from P&H, Viterra and Richardson

[Braveheart]

It's like protein has its's own market. When protein is abundant, protein spreads are more narrow and viceversa. For now, we just consider what the average protein spreads have been for the past 5 years and use that as an estimate.

We have also set (and picked off) targets. We used a base of #2cwrs 13.5px. We deal exclusively with Richardsons and found them to be as fair as possible with what is known about the marktplace as it develops.

What I like is we are selling to a sale. I like the feeling of the demand pulling our grain into the chain rather than us pushing it in.

If we had the luxury of waiting to see what quality we had first our strategy may have been different. However, and to the good, right now our crops look like our production will far exceed our storage and will look to get our contracted portions into the system.

[ado089]

I'm not talking about anything fancy.
Sell a Minneapolis contract and hold on
to it until you sell your actual for
cash at the daily price and buy back
your paper the same day. By doing that
you will be covering any downside that
happens between now and when you sell
your actual product. That leaves you
open to shop your basis and protein
spreads. Depending on your broker it
should only cost a few cents per bushel,
if that. In my short farming career
I've been screwed around enough by grain
companies enough to learn not to commit
anything to them until that grain is as
close to the pit as possible.

[Burbert]

Sounds like the potential fer alotta
boys/girls ta get screwed in the coming
marketing season. Open market functioning
at its best. You asked fer it you got it,
now go figure!!!!!!

[jethro456]

We had the same issues under the CWB, only we
didn't talk about it because we had no options.
Could only take what was given to us.

[jethro456]

We had the same issues under the CWB, only we
didn't talk about it because we had no options.
Could only take what was given to us.