If the remainder of 2017 is anything like the first week of the new year, farmers are in for a volatile ride in commodity prices. Soybeans saw a 20-cent rally mid-week, then two days later, dropped 17 cents. Bryan Doherty of Stewart- Peterson says with all the uncertainty, farmers should focus on a balanced approach.
“We've got a lot of good things that should provide hope for higher prices, but make sure and balance that,” said Doherty. “The last two years, if you weren’t at the right place at the right time, prices took it away. Make sure to sell the rallies, cover it with calls, buy puts on rallies and go into the summer covered on both sides.”
Mike Florez of Florez Trading wants producers to watch the market closely, in order to cash in on market movements.
“If you're a farmer that has corn in storage, I would sell puts against that with an option, 45 days or less, try to create an income stream for yourself,” said Florez.
Florez thinks we’re putting a bottom in all grain markets, so farmers have the opportunity to capture some of that value as markets trend up.
“I think we're going to go significantly higher over the next 18 to 24 months, so try to create the income stream,” said Florez.