Advisers Make Sales on Late-Year Rally

February 6, 2012 08:08 PM
 

TP Adviser Track RecordsThe wide trading range in the grain markets provided an opportunity for some advisers to effectively lift hedges in early December, and most advanced sales on the late-year strength.

Growing weather concerns in South America encouraged spot corn values to rally 88¢, while nearby soybean futures were able to rally more than $1.40 during the last month of 2011. Although most advisers stepped up and added sales, the Dynamic Hedge Program advanced sales most aggressively, moving to 100% hedged in 2011 crop corn and 30% hedged for the 2012 crop.

Overall, old crop corn pricing advanced 5% in December to stand at 63% priced while the 2012 crop corn hedges moved 7% higher to 19% priced for the advisers included in the Archer Financial Services Inc. Ag Hedge Program. 2011 soybean hedges climbed 11% higher to stand at 49% priced, and 2012 crop soybeans moved 5% higher to 20% priced as of early January.

"The Dynamic Hedge Program hedges are based on expected trading ranges for a 45- to 60-day time frame," explains Scott Harms of Archer Financial Services, who runs the program. "The late-month rally on declining crop prospects in South America simply pushed corn and soybean prices toward the top of those expected trading ranges and that triggered the standing sales
targets."

p76 Advisers make sales on late year rally Chart

 

2012 corn and soybean sales are slow-moving, with only 19% of corn and 20% of soybeans sold.
*Adviser uses hedged-to-arrive contracts, which do not show up as cash sales until the basis is set. Market value is average of cash sales, unsold portion plus futures/options value. To have your crops sold on the advice of one of these advisers, call (800) 933-3996.

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