Grain price drop

[AlbertaFarmer5]

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?

Thank you for posting this, I was about to do so.

As far as I know, they aren't even legally permitted to speculate.

[LEP]

Thank you for posting this, I was about to do so.

As far as I know, they aren't even legally permitted to speculate.

Reality of the trade is they are never fully covered. Can be short or long. But a trader doesn't have a job anymore if they go to far uncovered and the market moves against them.

[furrowtickler]

https://www.zerohedge.com/geopolitical/list-33-things-we-know-about-coming-food-shortages

Yet prices are dropping
Sooner or later …

[Taiga]

https://www.zerohedge.com/geopolitical/list-33-things-we-know-about-coming-food-shortages

Yet prices are dropping
Sooner or later …

Definitely a Hold unless you need some short term cash or contracted.

[agstar77]

Maybe some clarity with tomorrow's report.

[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.