Presold production issues

[Choice2U]

I am sure AOG covers too much rain. My marketing plan never contemplated the impact of signing an AOG clause contact whereby I only grew what signed. My plan was covering my ass for total wipeouts. Just wondering what one could do, if anything, if I ended up locking in pricing of this 100% of a poor crop and prices spike which has potential.

[boarderbloke]

Regarding presold production.

Klause, did you say you were 80% sold on 2014 new crop?

Are you missing the heavy rain and/or flooding?
Any concerns about production problems at this point?
Does the act of God clause in your contracts excuse heavy rain or flooding?

Any others heavily presold on crops without A of G, or futures trading where hedging can take place?
Are you holding all the risk?

[sk_wheatking]

I wouldn't want to be in his boots if that's the case. Why anyone would pre sell 80% of a yield estimate that you think your going to get is nuts. You never know whats around the corner. I would pre sell/book canola at a percentage of my crop insurance guarantee then I was never at high risk. When the rest of the grain is sold you always make out close on pricing anyway with averages. Looks like a long career in the oilfield for him,but maybe there are out clauses? Just never heard of any grain company having anything like that because they have sold that production themselves the minute you booked with them. No one wants to see someone go down because of weather like this.

[ajl]

BTDT. Last yr presold a little wheat. Got very little rain in June so held off on more sales. Got a crop saving rain July 19 ended up with an average crop while every one else had a huge one. Price goes to zero. Wish I sold more grain sooner. Farming in western Canada bites you in the a** more often then not. I can't wait for the investors from somewhere else get that lesson. They deserve every bit of it.

[hedgehog]

sorry, i meant rising, not diving!,

[cottonpicken]

Its called a short squeeze and its ruined a many a man

[cottonpicken]

The scary part is it is like a fire that feeds itself guys scramble to get out but nobody is there to take the other side of the trade so the price grinds higher and higher forward selling js essentially shorting the market and the ridk is tremendous funny how nobody talks about this on a marketing thread most consider it a risk managment tool without knowing the actual risk. And even if you can cover your position you have missed the rally