Combinables Price Tracker

[Brisel]

Quoted £17/t for option to buy Nov wheat.

Was that At-the-money?

 

[4course]

forward seller or spot seller - it makes no difference to the massive risk that a farmer exposes themselves to every season

there are few higher risk industries imo

risk on markets is insignificant vs weather risk

true but weather risk is beyond my control ,marketing risk is in my hands as is managing the effects of weather

 

[Devon James]

Who gets the gold star for selling yesterday afternoon? Dropped a fiver today

 

[teslacoils]

Was that At-the-money?

Yup.

 

[4course]

So, you're a farmer, taking a long position by growing produce unpriced. Is that not the very definition of risk taking?

There's no right or wrong answer to this, just your own ways of managing risk that you feel comfortable with.

farming is a risk think we can all agree on that, As you rightly point out its how comfortable you feel, over the years if never felt comfortable knowing ive missed out but find it much easier to live with and learn by my mistakes ho ho

 

[SilliamWhale]

Missed the highest of highs. I doubt the party is totally over though

 

[Chae1]

Lol, talk on the grapevine that a very large "farming Co' checked out a very large % of their wheat @ £165/t, bet they're kicking themselves now. Shareholders who'd have them!!

If they saw a decent profit in it at that price the shareholders can't really complain in my opinion.

It's just about spreading risk in my opinion.

 

[4course]

If they saw a decent profit in it at that price the shareholders can't really complain in my opinion.

It's just about spreading risk in my opinion.

there is well over a year left to go marketing 2021 harvest whats the rush

 

[Surgery]

Sold milling may movement 220 , demand picking up like the price but need a bit gone

 

[Chae1]

there is well over a year left to go marketing 2021 harvest whats the rush

Ive sold 8 loads of 22 harvest for £190/t. If that's my lowest price I'll be delighted.

The rush is I think we may be near the top of the market.

In the past it's only went to a certain level then dropped back down again.

Futures allows me with no physical wheat, barley in store to take advantage of current high prices, being driven by weather events around the world.

 

[4course]

Ive sold 8 loads of 22 harvest for £190/t. If that's my lowest price I'll be delighted.

The rush is I think we may be near the top of the market.

In the past it's only went to a certain level then dropped back down again.

Futures allows me with no physical wheat, barley in store to take advantage of current high prices, being driven by weather events around the world.

fair enough ,at my age got to consider might not be on the combine in 2022

 

[Bossfarmer]

Ive sold 8 loads of 22 harvest for £190/t. If that's my lowest price I'll be delighted.

The rush is I think we may be near the top of the market.

In the past it's only went to a certain level then dropped back down again.

Futures allows me with no physical wheat, barley in store to take advantage of current high prices, being driven by weather events around the world.

what happens if you dont make the spec? or tonnage?

 

[Bossfarmer]

Quoted £17/t for option to buy Nov wheat.

whats the difference between futures and options? ive never been one for selling until its in the shed, harvest weather can be tricky here

 

[Spencer]

Dead cat bounce..

 

[Brisel]

whats the difference between futures and options? ive never been one for selling until its in the shed, harvest weather can be tricky here

Options vs. Futures: What’s the Difference?

Options and futures let investors speculate on changes in the price of an underlying security, index, or commodity. However, these financial derivatives have important differences.

www.investopedia.com

 

[teslacoils]

whats the difference between futures and options? ive never been one for selling until its in the shed, harvest weather can be tricky here

One is a committment / obligstion to sell or buy X in the future at a given price.

The other is the option / right to buy or sell X in the future at a given price.

 

[Chae1]

what happens if you dont make the spec? or tonnage?

It depends what the market price is at the time. If its below £190/t they will just buy in cheaper barley from someone else. If its higher I will have to pay difference between what I sold at and they have to buy it at.

It's a very small proportion of our overall harvest so I'm fairly confident I will be able to supply it.

 

[Bossfarmer]

One is a committment / obligstion to sell or buy X in the future at a given price.

The other is the option / right to buy or sell X in the future at a given price.

always better with the option surely? youll no doubt have to accept a bit less though?

 

[teslacoils]

always better with the option surely? youll no doubt have to accept a bit less though?

Well, not really. Because if you spend £17 on the option, it has to rise by £18 before you're in profit.

And the value/ cost of the option changes too. An option is a "thing" and can be traded itself.

In a fairly flat market, options always seem pointless. In a rapidly changing market they are very dear. So as usual you need to buy them right. So still a fair bit of crystal ball.

 

[Bossfarmer]

Well, not really. Because if you spend £17 on the option, it has to rise by £18 before you're in profit.

And the value/ cost of the option changes too. An option is a "thing" and can be traded itself.

In a fairly flat market, options always seem pointless. In a rapidly changing market they are very dear. So as usual you need to buy them right. So still a fair bit of crystal ball.

Sounds like its not worth the effort when you put it like that