Crop prices have been less than ideal this year and the hits could keep coming. It is why one ag economist is looking at carry options.
“Decent carries have come back into the wheat and corn markets. And if you were one of the smart ones who got some early sales off and are feeling good about them, I’d be very tempted to sell the carry. You know, hold the grain and sell a (cash) premium for May or July futures. It’s a conservative move, but it protects a good start. If you price nothing, I’m certainly going to take a chance with some wheat in the bin. I don’t know what’s going to make it rally, but we’re at low levels, and we can hope for something.”
Decisions over the next few weeks will be crucial. Farm income is already down this year, and banks are starting to see signs of weakness in the farm economy. Lenders are reporting a slip in farm finances, slowing of loan repayment rates, and some having trouble making payments altogether.