Know Your Options in Marketing Grain

September 26, 2012 11:28 PM
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Spell Check

9/27/2012 11:04 AM

  Sell on cash market only: Pros: Maximum benefit to yourself and all other producers. Eliminate army of speculators and traitors living off of your farm. Cons: None.

9/27/2012 11:50 AM

  Forgot the minimum price contract (cash sale with call option purchase), but with these high prices, why would you do anything but a cash sale? Also, what is the author's definition of a "fair basis" on a forward contract?

9/29/2012 05:08 AM

  KISS - Some of my 2011 cash slaes were at historically high prices - yet - the market went higher. Makes me consider how esle to capture prices without risking loss of the high side that may yet come along. "fair basis" can be hard to get when I forward price some months into the future. Fair to me is something close to "normal" for the month/season and something that reflects supply/demand into the future. PullMyFinger - To sell all cash means on-farm (the best option) storage is required for a signifcant part of the expected harvest. All cash after harvest means storage without any price prtection untill sales are made. This doesn't work many years. The past two for sure, but I'm not certain the future will be a copy of these unusual experiences.


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