If you did not listen to this, please do. We debate strategy and land on some very smart ideas for managing the farm sales.
Weekly Video – USDA report, weather, strategies are debated and charts are well defined.
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- Buy SD 345 put and sell 400 call for 0-2 cent cost. This floors you at 345 and caps you at 400. This is a great “catch up” strategy if you did not sell 30% at 405 per our earlier recommendation because it gives you a floor yet keeps the upside open till 400. The market today is about 10 so it will take a rally towards objective to get it this cheap.
- Sell another 10% at 365 and again at 385
- Buy 2 CZ 360 puts and sell 1 CZ 380 call at 0 cost. This will give you a floor on 2 bushels at 360 but if we rally, you are only short on 1 bushel at 380. Again a great “catch up” strategy
- Sell 5% at 903 gap. This will bring total sales to 30%. We will sell another 10% after that on a further rally, probably 940-980 but that is not official yet.
- Buy 950 SD Sep Calls for 6 cents. These will give you upside protection when you sell this rally in an environment that could turn volatile depending on weather. This give you assurance that it is safe to sell into the rally. If weather concerns push prices higher, your calls will neutralize your sales and thus you will be able to sell those same bushels at an even higher price.