Play Turner’s Take Podcast Episode 216

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New Podcast!

In this podcast we go over the playbook for trading epidemics like coronavirus by taking a look at how the markets traded during SARS, Ebola, and H1N1 outbreaks.  Finally ,we go over the dilemma of covering new crop hedges.  I personally like buying some old crop to play the bounce when markets sell off too far, too fast and keep the new crop hedges intact.  In this podcast I explain why.

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Cover New Crop Hedges vs Buying Old Crop For Bounces

During the selloff on Monday, I had more than a few calls from farmers wanting to either pull off new crop hedges or buy old crop for a bounce.  They thought the markets move lower was overdone and I agreed with them. After thinking about it for a while like the strategy of buying some old crop instead of lifting new crop hedges for these reasons

* The bounces are most likely bigger for old crop than new crop

* We say we will sell new crop again when prices “get up there” again but there are no guarantees we rally that far

* The carry will work for us over the long term if we stay short new crop

* We are really just looking for a bounce because the market is oversold.  That is an old crop trade

Most of my conversations on Monday were about corn and soybeans, but this could also have been for wheat.  Take soybeans right now. We are short 10% new crop beans basis Nov from $9.73 and another 10% at $9.80.  If we think soybeans can rally 20 or 30 cents, I would rather buy March and then sell it on the next rally.

Call me at 312-706-7610 if you want to implement some of these strategies into your marketing plan

About Turner’s Take Podcast and Newsletter

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Craig Turner – Commodity Futures Broker

Turner’s Take Ag Marketing: https://www.turnerstakeag.com

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Twitter: @Turners_Take

Contact Craig Turner

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Turner’s Take Newsletter & Podcast – Turner’s Take is a complimentary weekly market commentary newsletter that covers the Grain, Livestock and Energy futures spread markets using fundamental, technical and seasonal analysis.

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