The logical conclusion is that another high-yielding crop could be at hand.
By selling put options, you are looking to collect the premium of the sold option and accepting risk.
While the market looks in trouble now, the more dominant and most critical factor determining price will occur in July and August. As weather unfolds, so too will price direction.
We do not see farmers aggressively selling corn on price setbacks until late July or August when they have strong confidence their crop is on the road to maturity and high yield.
Yes, these are powerful tools that can allow you to maintain discipline in your marketing, as well as shift risk.
As summer unfolds, the likelihood of farmers being caught with large amounts of inventory is less than it was a year ago.
The old saying that perception is reality may have a place, on occasion, when market volatility increases.
Another way to look at owning options is owning a tool that provides unlimited potential and limited risk.
Prices have been more volatile than a year ago, and are offering better opportunities to sell both old and new crop.
Preplan for summer weather to dictate price movement. Prepare yourself for any price direction.