Thank arbtigae... Could you please PM your info...also you'd you like you can explain some of these more advanced hedges (synthetic puts, collars, etc.) Also, are you familiar with hedge-to-arrive contracts?
A synthetic put is the process of selling the futures and buying a call to protect your upside exposure. This can be effective if the curve is skewed to the puts, thereby allowing a hedger to lock in a lower cost hedge than buying an outright atm put. This also eliminates the potential for excessive margin calls should the futures price go against you (rise). A collar/fence in your case would consist of purchasing a put and simultaneously selling a call to finance the purchase of the put. This is typically done at costless, however I advice against costless fences, or fences of any nature from a hedging perspective. By selling the call you are not afforded any upside gains should prices rally. You are also subject to margin calls if prices rally, despite having a cash position - if cash flow is a potential problem, stay well clear of fences. I have no direct experience with hedge-to-arrive contracts. I think you would have to custom negotiate a swap like that with ADM, Cargill, Bunge, etc. The best advice I can give is to not look at hedging as a speculation on price. Hedge when you can, not when you have to.
To ressurect this thread: I am looking at buying a put. Do i have to do this through a brokerage or will an elevator deal with this? If i go through a brokerage, how would that work actually?
================= Mr heech; Probably because most farmers already have plenty enough to do ; and many dont study trends, but they tend to respect risk . With plenty of crop insurance programs; they seem to be more common. DEC Corn is in a nice uptrend, most/many measures; hi moving average[50 week] is $7.06 low moving average[200] week is $4.80.Those are averages, not predictions. Remington Arms is selling 40LBS of deer corn @ Walmart, for $8; thats simply dried corn in a colorful bag.LOL Thay sold out last year, early. Now some are selling ''squirrel corn''; simply bagged corn on cob ,dried=sky hi price. Progressive Farmer mag does mention options somewhat regular; I am not a farmer, but enjoy farming communities, hunting....