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<blockquote data-quote="Anonymous" data-source="post: 357"><p>Your question is asked to me about 10 times a day. About 2 months ago I realized that the objective was no longer trying to pick a top against the extension in this market. So, I went back to the school books and looked at what "Hedgers" should be doing. A negative basis is a producers best friend. It allows him/her to make sales at a higher level in the future that may or may not actually be there when the future becomes the present. When I see the fewer numbers in the feed lots, I am still reminded that these numbers are lower off of record highs last year. Not only that, as profitability returns, custom feed lots can begin their sales pitch to regain lost clientle. With everything, the higher price will always curb demand. History shows us this repeatedly. So, a good marketer will look the 4, 6, 8 months down the road and say, I can live with X price and be happy regardless of the what the future holds. It's these individuals who take the risk factor out of the production picture that generally come out better time and time again. Be it Feeder cattle or Fat cattle, either be locking in cash forward contracts or use futures and or options to lock in what is currently available.</p><p></p><p> <a href="mailto:chris.swift@nashville.com">chris.swift@nashville.com</a></p></blockquote><p></p>
[QUOTE="Anonymous, post: 357"] Your question is asked to me about 10 times a day. About 2 months ago I realized that the objective was no longer trying to pick a top against the extension in this market. So, I went back to the school books and looked at what "Hedgers" should be doing. A negative basis is a producers best friend. It allows him/her to make sales at a higher level in the future that may or may not actually be there when the future becomes the present. When I see the fewer numbers in the feed lots, I am still reminded that these numbers are lower off of record highs last year. Not only that, as profitability returns, custom feed lots can begin their sales pitch to regain lost clientle. With everything, the higher price will always curb demand. History shows us this repeatedly. So, a good marketer will look the 4, 6, 8 months down the road and say, I can live with X price and be happy regardless of the what the future holds. It's these individuals who take the risk factor out of the production picture that generally come out better time and time again. Be it Feeder cattle or Fat cattle, either be locking in cash forward contracts or use futures and or options to lock in what is currently available. [email=chris.swift@nashville.com]chris.swift@nashville.com[/email] [/QUOTE]
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