Rallies and Downside Protection
This has been an eventful week in the grain markets launched by a surprising drop in corn acres from the USDA on Tuesday. Add to that some international trade and weather concerns, and Scott Shellady has some very pragmatic advice for grain producers and marketers.
Shellady… “If you're a producer, this is the time that you kind of have to put your pricing down on paper. Get your risk down on paper. And start taking advantage of some of these things. I know some of these levels that we're trading now still might not look as advantageous to you as you'd like, but there are a lot more advantageous than they were this time a couple of weeks ago. And that needs to be something that you really kind of putting in your business plan, because this is going to give us an opportunity. And sometimes I get all excited too about seeing some of these great rallies. I have to run myself: the hybrids that we're producing nowadays are still pretty resilient. So keep that in mind, get that risk on paper, use the exchange for what it's for. And if you're a producer, take advantage of some of these rallies where you don't have the cap your upside, but just maybe make sure that you own something on the downside to protect yourself for a move back lower.”
Some profit taking by funds ahead of the long weekend.
September Corn closed down $0.05 ½ to $3.42 ½.
Chicago September Wheat futures yesterday closed down $0.08 ½ to $4.90.
Live Cattle futures with another nice rally on Thursday, up $2.10 on the August board to $99.40. Feeder Cattle for August up $1.80 to $134.87 ½.
Class III milk yesterday up $0.54 to $20.95.