Posted by: usset001 | January 18, 2009

New year pricing opportunities

moneyiconEarlier this week I received an inquiry from a producer with a lot of old crop soybeans. He was looking for the right time to sell. Here is what I told him…
“I don’t make recommendations but I have shared the following with a number of producers since the first of the year. Soybean prices bottomed in early Dec and, despite this week, have had a good bounce since then. Before the sell-off earlier this week, prices were more than $2.50 off the Dec lows – they are still $2 higher today.

I want to sell rallies and fight the temptation to believe that the strength of the last month is here to stay.

The new year is here and, with it, a new tax year. I want to sell rallies.”


Responses

  1. I don’t think it makes any sense to hold soybeans or spring wheat. Both have inverted basis and an inverted board. The March-May in MPLS is a slight inverese. In soybean futures the old crop-new crop inverse is huge. I think both of those markets are telling us if we want to own then own on the board; if you do it via an option strategy then you don’t have to worry about the market turning back down.


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