Through our experience from working with more than a few grain farmers, we are always dealing with the producer dilemma of choosing whether they should hedge or make a cash sale. As similar as the two choices appear to be, they are NOT one in the same. Each action will eliminate downside price risk, but… Read more.
As commodities prices rally, producers of goods should be taking a hard look at marketing plans that will hedge downside price risk.
Part 1: Hedging Stock Exposure For those of us who are involved in the buying and selling of assets, the feeling of buyers/sellers remorse is one that can remain with us for a while. As anyone who has participated in these markets can attest, it is almost impossible to sell at the very top and… Read more.
Many believe that we are in a golden age of farming in this country. Since the summer of 2006, we have seen grain prices move in a big range, both up and down. These price fluctuations combined with below trend yields, new markets (such as China) becoming more willing buyers, and other policy factors have… Read more.
A few months back, the CME Group launched weekly grain options for corn, wheat, and soybeans. On Sunday, September 25th, the CME Group will introduce Live Cattle and Soybean Oil/Meal weekly options. These options, short term in nature, will trade just like the monthly options that we all know. Each weekly option will have a… Read more.
Talk with any hedger and they’re sure to tell you about an experience with trading on margin. Margin is a good faith deposit that a hedger must have in their account in order to initiate a long or short futures position. For example, the margin on a corn contract is currently $2,362.00. This means that… Read more.
The goal of hedging is to transfer price risk from one party to another. Hedging has been used for hundreds of years to help producers and buyers protect themselves from price risk.
Gold coinage goes back to 640 BC or earlier. The metal has retained its value since, climbing to extreme highs. The market has accepted the price levels of gold without waiting for any significant dips. We have buying support from countries such as China and India. Fund Managers have added Gold to their trading portfolios. … Read more.