Most trade watchers like to compare the current market situation to 1996 or 2008. Although the market fundamentals are quite different, it appears that the advisers used their experience to their benefit.
In 2008, sales were made early and often with little left to reward the last $2 of the rally, notes Scott Harms of Archer Financial Services. "For the most part, the advisers have been more measured in their sales than in 2008," Harms says. AgResource especially has shown patience in marketing 2010 crops. "The advisers seem reluctant to initiate re-ownership strategies for previous sales," Harms adds.
Bryan Doherty of Top Farmer Intelligence thinks this patience reflects two factors: Overall bullishness in commodities with tight world inventories; and the strength exhibited in cotton as well as lessons learned in 2008 when "great sales" were viewed as not-so-great when the market took off.
"It does not take a vivid imagination to guess how high prices could move with a weather threat," Doherty says.
This cautious activity may change in order to better participate in a potential weather-related summer rally. So far 2011 sales have been slow; generally hedge levels are near 25% for the nine advisers tracked by Top Producer and the Archer Financial Ag Hedge Program. Until we know more about the 2011 crops, price activity will likely remain volatile with a bias to buy on price setbacks. —Jeanne Bernick
If you have any questions or comments regarding the track record information, contact Mark Soderberg or Scott Harms of Archer Financial Services, Inc., at (800) 933-3996.
- Spring 2011