2019 Corn Producer “Scale-In” Hedge Strategy Update
May through July offered an excellent opportunity to start our hedge campaign for 2019.
In light of the next to impossible early planting conditions throughout the corn belt, the prices somehow, are right back down to the early May lows.
Unbelievable! Which is why a "proactive" approach must be taken by buying puts into rallies each season on a "scale-in" basis.. We had 3 trigger sell signals this year, see chart below. We try to remove as much forecasting as possible by using our triggers.
No forward contracts, no futures contracts, no margin calls, which leaves the upside wide open every growing season.
We are now in the 30 day window for a seasonal low(see 2nd chart below) and have already got a buy trigger to begin lifting the hedges. Although it is still a little early, our goal is to increase the bottom line, so exiting a portion of the hedge makes sense. Will look to be completely out and long over the next 30 days.
There are limited risk option strategies to get long that producers as well as speculators have begun to implement. Would be glad to share them with you, call/reply to discuss.
Seasonal Chart for Dec Corn:
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This post was written by Louis Rose