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A true Texas hedge in the cotton, long the board and long the bin. Farmers
are without a doubt the most bullish people. Always have been. The
government has been offering some pilot programs the last few years to get
them to use options to hedge their crops. Needless to say the doors on the
CBOT and CME are not knocked down, so the programs had limited impact.
Regards,
John J. Lothian
Disclosure: Futures trading involves financial risk, lots of it!
In a message dated 3/1/99 2:57:03 PM Central Standard Time, bshumake@xxxx
town.com writes:
<< Why don't farmers hedge? Good questions ! In fairness, I suppose some do,
but I've never known one who did. Many years ago used to be a futures broker
in the Texas Panhandle where a lot of cotton is grown. I would always try to
get clients to hedge their crop, especially when prices were good or were
dropping....They would never do it. The reason that was always given was that
" they felt like it would be betting against themselves", utter lunacy ! So
as a result of this thinking, I always had clients that had acres of cotton
in the fields and be long cotton futures at the same time....it made no sense
then and still doesn't...but I assure you this type of thinking is wide spread
in the farming community.
Baffled....
Bill Shumake
>>
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