An uptrend in the cattle market allows producers to take no risk-management moves and get away with it. However, a current falling market trend screams, “Take action!”
Be ready for a sharp rally, as it could occur in weather-driven markets. The key is to have ownership so you’re rebalanced and can take advantage of higher prices to pull up your average price.
If conditions improve, expect little rally potential in corn. At the same time, be prepared for downside potential, as projected carryout will still be viewed as adequate, despite lower acreage.
Note to farmers: In years following record yields, there is a high probability of a price rally. And 50% of the time, the rally comes in June, July or August.
With recent moves in the stock market, this analyst would like to bring to your attention an approach you can use to protect your investments.
If weather isn’t a factor, there are two strategies you could implement: purchasing a put option to establish a price floor or the fence strategy.
The rally in cattle prices has occurred in the face of expectations of increasing supplies throughout late spring and summer, this analyst says.
2017 may already be off to a less-than-ideal start, and this firm suggests being patient before making too many sales.
This marketing firm recommends you purchase all of your expected needs through the end of 2017.
Stop orders are typically used on futures contracts, and they can be used in options as well.