04/14/2025 Green Jacket

On the Grains
What a finish to yesterday’s Masters, as Rory McIlroy needed an extra hole to win after blowing a comfortable lead. That also reminds me of grain marketing: Sometimes, we make great sales, and sometimes, fear drives our decisions, last week’s cattle trade was all about emotion and algorithms. However, what was important was that he didn’t lose his composure and allow one bad stroke to ruin the great tournament he had played. If I have seen it once, I have seen it or said it a thousand times myself, “If this sale is your worst, you will have a great year.” Often, waiting for the market to make another higher move that may or may not come to make another additional sale. The next three months will be vital for how fast and how many acres get planted. The weather, so far, isn’t favorable for 95+ million acres, and we never know what the summer weather will be like. Put options may be a helpful tool this spring to manage market movements. When writing this, December 25, $4.60 short-dated with a June expiration, is trading at 15 cents. Now, maybe that is not a level you are overly excited about, but that’s fine, there is nothing wrong with putting an offer in for $4.80 or something higher at a price and letting them work.  I am watching the short-dated because the price between them and the full-month options is about 50%. Yes, you don’t have the time, but we should have a better idea of the acres and weather by then. This forecast appears to take some risk off the table.