Posted by: usset001 | March 14, 2014

A second chance at pricing new crop HRS wheat

MGEX Sep'14 wheat futures

MGEX Sep’14 wheat futures

Last fall I was a little slow in developing and posting my 2014 pre harvest marketing plan for HRS wheat. I finished it in early November and first posted it on the CFFM website in mid-November. I consider the selection of a minimum price objective to be the single most important piece of a pre harvest marketing plan. It’s important because I will price grain only if the pricing opportunity is higher than my minimum.

For 2014, my minimum price objective for HRS wheat is $7.50/bu., MGEX September wheat futures. I lacked urgency in posting my plan because the Sep’14 contract had traded above the $7.50/bu. level for many months prior to the posting of the plan. It fell below $7.50/bu. in late October. I posted my plan and patiently waited for the rally back above $7.50. Ouch. Prices bottomed in late January at close to $6.15/bu. That’s slide of about $1.50 from mid-October prices, or 20% lower. Double ouch.

The rally back began in early February and the wheat markets has increased more than $1/bu. (all wheat markets, not just the Minneapolis market). Currently trading near $7.25/bu., we are not quite back to my minimum price objective. Nevertheless, I can’t help but view this as a second chance to price some new crop HRS wheat.

No actions yet but I’m thinking hard…


Responses

  1. This article is so good to read. Excellent!!
    Many thanks for sharing, I will post it on my Tumblr to share with my friends?


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