ManyHorses":xqrjxkl6 said:Ag futures and options are widely traded on the Chicago Mercantile Exchange... please visit www.cme.com.
Who trades 'em... the futures market is hugely larger than the NYSE and it's common practice for financial insitutions and commercial giants (Post, General Mills, Armour to insure themselves against price fluctuations and supply shortages. We 'little guys' are mere drops in the bucket.
i.e. If you were to get a bank loan on your cattle, most likely they'd either sell a call against them or buy a put to protect their investment in you via the loan.
I don't believe in any kind of formulas or get rich quick schemes... Writing a book geared towards farmers and ranchers is my way of spending the winter in Tucson, AZ and filling an obvious need in the marketplace.
ManyHorses":2i09ayn5 said:I've never suggested that "producers write (and deliver on)" their cattle. I may from time to time suggest writing against their cattle, but never with the intention of delivery
ManyHorses":2i09ayn5 said:I'd sell a 'Call' against your cattle
ManyHorses":2i09ayn5 said:deliver your cattle against the Call price you sold
Rod, it seems that you keep getting overlooked in your efforts to get a simple, straightforward, no HS answer to your question. Since Richard seems to have overlooked it, I'll take another stab at it if you don't mind. Maybe when Richard formulates a strategy, he can add to it or correct me where I'm wrong. Keep in mind that I'm telling you exactly what I would do in your situation with real stock, not keyboard cattle. My advice may not be good enough for the experts, but it is good to me in most cases. Like many cattlemen, though, I've made some decisions that I wish I could do over. ;-)Rod":16hdxaye said:Richard, I never knew anything of the such about your post so maybe you could explain to me exactlly what you mean with my given situation.
I've got about 25 calves 500-550lbs and about 30 that are 200-350lbs. My thought behind my question was I've got these 25 @ selling weight, but I was looking for a little insight as to when might be the best month to sell them. As for the other 30 it looks like I've got to choose the spring,summer, or fall market.So......if anyone has any theroies I'd love to hear them.
Texan":2zvohjip said:Rod, it seems that you keep getting overlooked in your efforts to get a simple, straightforward, no HS answer to your question. Since Richard seems to have overlooked it, I'll take another stab at it if you don't mind. Maybe when Richard formulates a strategy, he can add to it or correct me where I'm wrong. Keep in mind that I'm telling you exactly what I would do in your situation with real stock, not keyboard cattle. My advice may not be good enough for the experts, but it is good to me in most cases. Like many cattlemen, though, I've made some decisions that I wish I could do over. ;-)Rod":2zvohjip said:Richard, I never knew anything of the such about your post so maybe you could explain to me exactlly what you mean with my given situation.
I've got about 25 calves 500-550lbs and about 30 that are 200-350lbs. My thought behind my question was I've got these 25 @ selling weight, but I was looking for a little insight as to when might be the best month to sell them. As for the other 30 it looks like I've got to choose the spring,summer, or fall market.So......if anyone has any theroies I'd love to hear them.
A lot of the answer depends on how much grass you've got or expect to have. Right now, you probably don't know for sure. Assuming you will have enough room through fall, this is what I would do......As soon as markets straighten back out after the first of the year, I would sell the cattle that are big enough. When I say 'straighten back out,' I mean get over some of the large runs that often happen right after the New Year because of guys holding back cattle for tax purposes. If the market is still acceptable then, sell your big calves. Put them in the bank. Sometimes, its often a lateral move to take calves that size on to 6 plus weights. Even with steady markets, they sometimes don't bring much more per head than they will as 5 weights.
Take your 30 light calves and be prepared to wean them and have them straightened out when Spring greenup gets here. Castrate, dehorn, vaccinate, pour and be where you can kick them out on grass and forget about them until fall. A fall yearling is almost always a scarce commodity. Sometimes you can almost name your price for them! By Fall 2005, you will have some of these.
Is there some risk, here? :roll: Well, duhhhhh! If you can't stand any risk, you're in the wrong business! My idea of hedging and controlling risk is to put some cattle in the bank when they're ready, and keep some that can't really hurt me. If you've got enough grass, 30 fall yearlings usually won't hurt you.
Richard can probably answer this better than me since that is his field of expertise. Maybe he can help me out if I can't explain it. What I was trying to say is that there are always plenty of yearlings in the Spring because most cowherds are Spring calvers. Less yearlings in the Fall because fewer calves were born the previous fall.G&L Cattle":3foy07tq said:What do you mean by saying that fall yearlings are a scarce commodity?
fit2btied":7wyecomx said:Hey Texan, did you ever think about writing a book? Might have a best seller on your hands!
Richard can probably answer this better than me since that is his field of expertise. Maybe he can help me out if I can't explain it. What I was trying to say is that there are always plenty of yearlings in the Spring because most cowherds are Spring calvers. Less yearlings in the Fall because fewer calves were born the previous fall.
There are always big runs in the Fall, but they are mostly calves. Fleshy, soggy, milkfat bawlers. A lot of those come off the truck looking for momma. Yearlings come off the truck looking for a trough. The real demand in the Fall is for something straightened out and ready to go to work and finish in time to hit the best fat market. That is normally early Spring.
ManyHorses":39t1pdgt said:Look at yourself looking forward on yourself looking back at yourself...
ManyHorses":39t1pdgt said:In other words, look forward at yourself next fall and wishing you had fall calves for sale... and kicking yourself for not having 'em... Ask yourself why when you had the chance earlier in the year, that you didn't set up your operation to achieve that end.
ManyHorses":39t1pdgt said:Now you can see why some folks accuse me of doin' things kinda 'ass-backwards... :lol: :lol: :lol: