It's been a great year in so many ways. I am sure I am the luckiest rookie farmer ever. Tomorrow I will make my first cash grain contract (as a farmer seller) of my life. I think it is time to lock in basis on new crop beans. I expect farmers to sell beans and store corn at todays prices. The slug of beans coming to market could make basis very sloppy. Since I dont have a lot of choices on markets I want to have a good home ready.
Intersting thing happened in that I had 2,500 bu of extra beans and 2,500 of extra corn to hedge basis yield expectations. Since contracts are for 5,000 bushels I decided to sell 1 bean contract to cover both. That was the exact wrong way to go up until 3 days ago. As of tonight I am finally almost back to where I would have been if I would have hedged the corn in the corn pit at $4.10. Im still glad I did hedge it but it was a cheap lesson in how dangerous cross hedging can be.
I have really been working the 2010 budgets. You can do this an watch your children at the park and earn points with th wife all at the same time. We have all our 2010 beans sold and about 30% of the corn. Actually Im going to loose 35 acres next year so Im only expecting 3,500 bushels of beans. Once again Im oversold due to contract size. Its working but..... At least Im not cross hedged.
Good night all,