An Overwhelming Focus
Posted: Wed Dec 20, 2006 12:19 am
A HEDGE 'DRAWDOWN'
I grain farm and short hedge crops via incremental selling in rising markets based on profitability. SO, I have sold Minn Wheat from 4.50 up to 5.00 and am out 2.5 years worth of production. There's currently 50k left on the table.
I have funds to go out another 1.5 yrs worth of production, based on a 6.50 top.
The 50k in margin is eating me up mentally. What coulda, shoulda, woulda!! Why didn't I just put our hedge plan on hold for the last 4 months? We carry enough risk in the cash end of things with drought, hail etc that every penny on the futures pricing side is valuable.
And now canola is entering our incremental profit criteria!!!
How can I stop focusing so much on the hedge drawdown??
cliffg
I grain farm and short hedge crops via incremental selling in rising markets based on profitability. SO, I have sold Minn Wheat from 4.50 up to 5.00 and am out 2.5 years worth of production. There's currently 50k left on the table.
I have funds to go out another 1.5 yrs worth of production, based on a 6.50 top.
The 50k in margin is eating me up mentally. What coulda, shoulda, woulda!! Why didn't I just put our hedge plan on hold for the last 4 months? We carry enough risk in the cash end of things with drought, hail etc that every penny on the futures pricing side is valuable.
And now canola is entering our incremental profit criteria!!!
How can I stop focusing so much on the hedge drawdown??
cliffg