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Steve wrote......<Why don't producers hedge wheat at $7.00...because at the
time,
they think wheat is going to $10.00. >
As per what Keith stated.......IF you hedge at 7.00 and you have a short
crop....you might have to cover at 10.00 on a portion of the crop that you
anticipated having......thus you have turned a hedge into a losing spec
position........
Part of the reason grain prices increase in price is because of low
supply.....IF farmers hedged ALL of their anticipated crop......and that
crop turned out to be low......guess what happens...........
For the answer......look at the May Wheat chart from 1996.....it only went
up 2.00 on expiration day.............
Tom Stein
comfut@xxxxxxx
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