For many, planting a high-input crop such as corn may not fit the profile lenders want to see.
Strong export activity can, in part, be attributed to the recent rise in both cash and futures prices.
The winter doldrums and uneventful markets are, for many, creating a nonchalant attitude toward farming, as well as marketing. That being said, be prepared for change and volatility in 2018.
As the year winds down, beef exports have been a bright spot for agriculture.
To shift the risk of lower hog prices, consider forward contracting, selling futures, or purchasing a put.
It is likely, however, that demand will strengthen in the months ahead and farmer selling will remain light.
Some are suggesting that with today’s hybrids/genetics, weather doesn’t matter as much.
Buying futures is similar to owning corn in storage, in that it is subject to gains or losses as the market moves higher or lower.
On a cautionary note, herd expansion continues.
A corn producer who sells his corn in the spot market after harvest, and believes prices may go higher, could purchase a call option for the chance to be long the market and retain ownership.