Reward the Market with Small Sales

July 12, 2010 02:05 PM

The Gulke Group has had no hedges on for the past several days. “I didn’t dream we’d gain 40¢ in corn or 50¢ or 60¢ on wheat,” says Jerry Gulke. “But now we are in an area where it’s time to look at cash flow and profit opportunities.

(To request Gulke's charts and analysis, click here.)

“We’ll watch how the market closes today. I’d expect it to close lower ‘just because,’” he says. “If we close strong or even unchanged, it will be a moral victory based on the fact that there are a lot of people who want to take profits ahead of the weekend because we could see weather turn for the better again. On the other hand, there are others who say, ‘Well, I’ve been here before—Friday it looks not so hot and by Monday it’s hot again and there goes the market again.’ So I expect a lot of volatility.

“Trade small and begin to reward the market. We’ll start to sell in the cash market again for July 2011 delivery if we can get close to $4,” he says. “Otherwise, we’ll use more futures than options because you could get nervous today and call a 10¢ break and here comes Monday and there’s a 15¢ rise. So we’ll spend a little on marketing and maybe I’ll fall 30¢ short of the high on beans and 15¢ or 20¢ on corn [premiums] but if the highs are a lot higher, there you are!” 

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