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With September Corn trading at $2.19 and December Cotton at 45 cents what would be a marketing strategy if you did not hedge or forward contract six months ago when the price was 30 percent higher? One suggestion for corn would be to store it and wait for higher prices. DON'T DO IT! Instead, consider selling the corn for cash and buying corn futures. This would still keep you in a position in the corn market and you would not be paying storage. If and when the price goes up, your gain in the futures market would be taxed less than if you held the corn.
Although there appears to be no reason for cotton prices to go up, December 2005 futures below loan has upside potential. If you missed a chance to hedge this year's crop at 65 cents, let's not miss some marketing opportunities for the 2005 crop. Spending 2 cents on calls could be very beneficial for 2005.
I am always available to answer your market or hedging questions. Please call me at 254-715-5055.
By Bryce Myrick
Director, TFB Agricultural
Marketing Education
Fundamentals:
Exports are good, but big crop projected
Technical
Analysis: Trend - Down; Resistance - 48.30; Support - none
Fundamentals: Boxed beef prices will be key
Technical
Analysis: Trend - Up; Resistance - Broke Above; Support - 85.00
Fundamentals: Looks like a record crop
Technical
Analysis: Trend - Down; Resistance - 2.81; Support - 2.13
Fundamentals: No upside without hot dry weather
Technical Analysis:
Trend - Down; Resistance - 6.62; Support - none
