Combinables Price Tracker

[Full of bull(s)]

What’s feed barley today? North east uk

Spot delivered £186 Argrain this morning

 

[SilliamWhale]

I can, I was lucky being pool seller worked massively to my advantage that year.
Those that sold lots forward and then didn't have the crop suffered badly.
Can't actually remember if spot was better than prior forward sold though. Seem to think it was.

I was put in a hole after 2012. Had a terrible spud year 2011, gave up spuds then sold forward for £150 in 2012 and had half the crop!! Only this year have I actually climbed out of that hole properly!

 

[Northeastfarmer]

Spot delivered £186 Argrain this morning

Thank you

 

[neilo]

I wouldn't say selling forward is trying to outwit the market

You are taking a position where you think the market will actually be lower by the time we get to the point where it is collected/delivered. The buyer is taking the opposite position, a betting that the market will have moved beyond that point.

If a merchant is offering £150/t for wheat in September 2019, it is only because he thinks it would cost him £160/t by then. You would only be selling it to him if you thought it was going to be £140/t.

Gambling, pure and simple.

 

[SilliamWhale]

You are taking a position where you think the market will actually be lower by the time we get to the point where it is collected/delivered. The buyer is taking the opposite position, a betting that the market will have moved beyond that point.

If a merchant is offering £150/t for wheat in September 2019, it is only because he thinks it would cost him £160/t by then. You would only be selling it to him if you thought it was going to be £140/t.

Gambling, pure and simple.

I dunno. The buyer is buying stuff all day every day so they're only buying on what they can sell on. They wouldn't be buying and sitting on it.

 

[Chae1]

Can't you remember 2012?

Yes. It was wet.

 

[SilliamWhale]

Yes. It was wet.

And the price went up.

 

[crazy_bull]

You are taking a position where you think the market will actually be lower by the time we get to the point where it is collected/delivered. The buyer is taking the opposite position, a betting that the market will have moved beyond that point.

If a merchant is offering £150/t for wheat in September 2019, it is only because he thinks it would cost him £160/t by then. You would only be selling it to him if you thought it was going to be £140/t.

Gambling, pure and simple.

most of mine are selling next year hoping it is the worst price they sell at as they will have more to sell at a higher price, but equally happy if it is the best they sell at. Like someone else said it's all about the average price at the end of the season. if your first price is your worst then you build on it.

C B

 

[Chae1]

And the price went up.

It was 6 years ago. If we get freak weather conditions 1 in 6 I won't base my marketing on that.

Some people won't lock in any again because of what happened this year. I locked in at 140 and today could get over 190 , but not losing any sleep over it. Was happy with price on the day.

 

[Clive]

You could all just buy options !

 

[Clive]

You are taking a position where you think the market will actually be lower by the time we get to the point where it is collected/delivered. The buyer is taking the opposite position, a betting that the market will have moved beyond that point.

If a merchant is offering £150/t for wheat in September 2019, it is only because he thinks it would cost him £160/t by then. You would only be selling it to him if you thought it was going to be £140/t.

Gambling, pure and simple.

I don’t think merchants care if wheat is £100 or £200/t it makes no difference to them as the trade on a margin and are not speculators (appatantley !)

A future price exist to allow the end user to cover his future costs by locking into a buy in price just as a cereal farmer might wish to cover their production locking into a selling price

The speculators between the farmer and end user are traders not merchants

Life would be very dificult without the traders and these markets - they provide liquidity in a market that allows to all to sell any qty any day of the year for any sale point now or in the future


Traders are gambling - farmers and end users are buying insurance essentially so quite the opposite of gambling

 

[Clive]

I was put in a hole after 2012. Had a terrible spud year 2011, gave up spuds then sold forward for £150 in 2012 and had half the crop!! Only this year have I actually climbed out of that hole properly!

Forward physical sales is a dangerous game as you learnt, I don’t think I would ever sleep iIf more than 25% of my physical crop was sold forward and I would only commit that much when it was actualy in the ground.

I might consider 10% pre drilling but that’s about as brave as I get having lived through 2000 and 2012 !

Option are a smarter option - I bet when you sold that feed at £150 a sub £10/t option would have got you locked into the same price (so min £140/t return) yet when the market rocketed on the back of poor weather you would have sold at far more than your £150 target and taken great pleasure in ripping up your option contract that you wasted a tenner on !

 

[B R C]

How much is an option on November 19 wheat?

 

[franklin]

Unsure. May 19 osr was fifteen quid. May 19 wheat thirteen quid.

 

[Clive]

How much is an option on November 19 wheat?

I’ve asked for a few quotes today - will let you know when I get answers

 

[Badshot]

Forward physical sales is a dangerous game as you learnt, I don’t think I would ever sleep iIf more than 25% of my physical crop was sold forward and I would only commit that much when it was actualy in the ground.

I might consider 10% pre drilling but that’s about as brave as I get having lived through 2000 and 2012 !

Option are a smarter option - I bet when you sold that feed at £150 a sub £10/t option would have got you locked into the same price (so min £140/t return) yet when the market rocketed on the back of poor weather you would have sold at far more than your £150 target and taken great pleasure in ripping up your option contract that you wasted a tenner on !

Would that option have helped if you literally had oversold that harvest though, ie, sold more than you got?

 

[B R C]

That’s the point I think, you don’t actually sell physical, you buy the option to sell at a price, if the price falls you win if it goes up you don’t use the option. You still have to pay the cost of the option though, which Clive is going to tell us hopefully.
I think they could be useful in a year like this when you can get a decent price for Nov 19 but if there is a another bad year(worldwide) prices could rocket up further.

 

[B R C]

@Clive who do you actually buy the option from?

 

[Steevo]

@CRM AgriCommodities might be helpful here

 

[Brisel]

You are taking a position where you think the market will actually be lower by the time we get to the point where it is collected/delivered. The buyer is taking the opposite position, a betting that the market will have moved beyond that point.

If a merchant is offering £150/t for wheat in September 2019, it is only because he thinks it would cost him £160/t by then. You would only be selling it to him if you thought it was going to be £140/t.

Gambling, pure and simple.

The merchant will hedge a purchase from a farmer with futures or a demand from a consumer, not be left with an open position. Most of them are just hoping to buy and sell straight on, making a couple of quid margin along the way. The locals around here square their books daily or at least know how open their positions are at the end of every trading day. Ask Openfield what an unhedged position cost them recently