Advisers made a variety of changes in hedge positions in the final month of 2011. Some used the weakness in November to bank profits, while others piled onto previously hedged positions.
The average hedge position for 2011 crop corn stands at 63%, a slight increase from November. Soybean hedges for the 2011 crop were actually reduced by 6% and sit at just under the 50% level.
Corn hedges for the 2012 crop were mostly unchanged at 20%, while 2012 crop soybean hedges edged 4% higher to the 20% level. The historically strong basis has advisers converting hedges into cash sales and then re-owning sales on paper. With few signs of a bottom in place in the grains, the advisers in the Archer Financial Ag Hedge Program have yet to recommend re-ownership strategies.
The Stewart-Peterson Advisory Report recently cashed in a profit on futures hedges as prices dropped to major technical support levels, notes Naomi Blohm, senior market adviser with Stewart-Peterson.
"With the market slowly approaching the recent low, versus a crash landing, it seemed appropriate to grab profits," Blohm says. "The market was technically oversold, so it seemed corn, while not having a reason to rally higher, was done going lower for the time being. The next scenario plan has producers ready to protect corn prices, should this near-term support area fail."
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.
- January 2012