Taking into consideration the favorable spring we have had for planting thus far, producers may want to look at hedge recommendations for new crop soybeans. If 2010 produces normal weather and trend line yields, November Soybean prices could be $1.00-$2.00 lower by fall.
Options are able to provide downside protection with a set risk this early in the season. An at the money November Soybean Put option is approximately $0.50-$0.60.
Other option strategies are also available, so please give us a call if you are looking to protect some of your 2010 production. Now is also a time to consider corn and wheat strategies as the early planting season in the US progresses.
There are always many issues that will affect prices of all commodities, and as we move forward we need to be aware of the financial, interest rates, and currency markets, along with weather, etc.
This risk on corn could be $0.60-$0.90 lower, Soybeans $1.00-$2.00 lower, and Wheat $.075-$1.00 lower.
At the money Put options for Corn are $0.35-$0.40, Soybeans $0.50-$0.60, and Wheat $0.35-$0.40. These could be looked at as the start of a marketing program for 2010.
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