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north central Oklahoma | The next few years are going to be very challenging from a marketing standpoint and I can kinda see both sides. Very few of us sell to endusers. The local co-ops or other elevators are only middlemen, and many of them farmer owned, with some of your neighbor farmers on the board of directors. They are not charitable foundations, they are in this game for a profit, some of which comes back our way each year as stockholders. As price/volitility increases, their basis widens, that's what they have to play with for profit.
When we go in and contract grain local for future delivery, the elevators turn around and short the board to protect their position. I can do the same thing by just buying a july put or just shorting the board and spend my money to protect myslelf from price declines, of course marginning even more if prices go up on the short position. I dare say that we would do anything any different if we ran the show if we were concerned with our bottom line.
Farmers are presently in a conundrum and hesitate to sell into a possible rising market (or falling according to AT) and the elevators are hesitant to buy into a possibly rising/falling unstable market.
As SC insists, keep your powder dry, you will need it | |
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Can't book wheat elevator say's
