Q: Hello Howard,

Thanks for responding to my previous email.  As you can tell by the date since you replied that I have been procrastinating as well as hoping that the markets would recover some which they have.

I feel like I should tell you a little about me and my current situation.  I farm @ 2500 acres in east central SD and typically produce 20 to 30000 bu. of winter and spring wheat, 30 to 40000 bu. of soybeans and 120 to 160000 bu. of corn in a given year.  Currently I am 100% sold in wheat but still have 20000 bu. of soybeans stored on farm with currently no futures positions against it and around 25000 bu. of corn again with no positions on the board.  I have been farming for 15 years and am 41 years old.  I have always handled my own marketing up till last year in which I hired a consultant which was a good experience but taught me that I shouldn't spent big money ($10000) just for some one to guess along side of me.  Marketing used to be easier on the cash side...use your farm storage and capture the carry and basis gain...use the seasonal trends to do some forward sales... and on occasion retain ownership and take a straight futures position instead.  my most profitable times were when my intuition told me to sell on the cash side and sell futures at the same time.   But for the first 14 years of farming one could use a protective stop and even if you were wrong it would take a month for the market to hit your stop now you can be right and yet you are stopped out in 15 minutes.  This you already know.  

I have been reading what you have wrote on options and I agree and in my own experience that straight options just don't work. I have been on the right side so many times and yet the option value never made up for the loss in equity on the cash side.  It seemed that only straight futures can do that.   Your fly strategies from what I have read do a much better job at this with much less risk and I would like to do some to get my feet wet and learn another tool to use for my marketing.  One thing that puzzles me is that I can see the merits of a fly for trading and speculating but am having difficulty seeing how they can be used to help in my cash marketing and better protect equity particularly when it is still in the field and or when growing conditions are not good.  Right now my gut tells me to sell the rest of my 08 inventory and get some sales on for 09(I would prefer a futures position at this time but not opposed to some cash sales too).  I don't believe in the private estimates coming out that we will plant 4 million acres less overall than we did last year.  I Know firsthand that expenses have rocketed out of control for 09 but will readjust for 2010 and that $4.00 corn and $8.00 beans and $6.00 wheat are not going to be that profitable this year but that is like most years and if we planted it all at $2 corn and $5 beans respectively it will all go in this year too.  

I also don't believe our government's solution to the financial mess is going to work and demand will continue to shrink, so I am more negative than positive at this time and don't like the risk I have going into the acreage report and the planting season. I would like help timing of cash sales but more importantly protecting the whole equity of the crop and using your experience to not only accomplish this but  to try and get more out of the futures market as well as I believe it will be more critical to do so if one wishes to stay profitable in production ag.  With this I will let you suggest which services I should subscribe too and any other advice you may give but I do want to give you an opportunity to work for me.  I hope this was not too long and I appreciate your advice.

Regards,

Luke from S. Dakota

Response: Hello Luke, Thank you for your detailed informative email. First thing to do is to subscribe to the daily service, this keeps you up to date daily about exactly what I am thinking.   Next, I think you should get some consultation time, and I could help you accomplish your wants and needs. This is not hard for me, and I will explain everything to you and make sure that YOU understand what you are doing, and why you are doing it. I can have my secretary send you a link. Also, I think you should open an account at my firm Futures Flight, I am an Introducing Broker for MF Global. My secretary can send you the online link to open an account. MF Global handles all your funds and order execution services. You will get a free platform to use to place your trades and view your account 24 hours a day. You will have a 24 hour order desk, 24 hour tech support, and someone who can help with any problem you may have. I pay them well for this service, and I consider them the best. When you do grain trades, You can place them with me when I am available, and you will actually hear me call the trade floor, my friend who is a member will put on his headset, and go into any pit on the CBOT floor. You will actually hear him bid or offer your order after getting a market for it in the case of options. We can change our price, get a fill, or cancel the order in a heartbeat. This is what service a grain exporter has for their operation. This is one thing that I provide that a person with 50 times your farm size cannot find. No middleman, no wait and I will call you back and tell you what happened. I will answer your emails or give you a quick call if need be to explain the answer to your questions. You did tell me enough to know what you need to do, I will tell you when we talk. We could talk Friday night, or Saturday afternoon. You need a pen, paper, no distractions, and have your questions, complete list of what we need to protect, and what goals you have on some or all of your crops. I could explain some ways to market your products that will fit your needs. You can protect lets say, soybeans from the current price down to lets say $6.60 beans, but below you will keep them. The put flyspead works great, and is a much cheaper way to purchase price insurance. Lets talk before Monday, so you can be prepared on Monday going into the report. I will tell you what I think, but I will give you the strategy that reflects YOUR thoughts and needs. I look forward to work with you.  Sincerely,