How to Financial Hedge Organic Corn Prices

How to Financial Hedge Organic Corn Prices

As a purchasing manager, you might have learned that it’s prudent to “buy when you can, not when you need to.” This saying is pertinent because once input prices start to rise, finding a source at a reasonable price can be challenging. One way to mitigate your risk of increasing costs is to use a financial product to offset your exposure.

A case study: Organic corn prices are rising

Let’s discuss an example. You have noticed that one of the critical inputs into your organic poultry feed has started to rise. You want to set up a contract that will allow you to purchase organic corn before it starts to trend higher. Unfortunately, when you call your supplier, he tells you he is unwilling to sell yet. After speaking to a few merchandisers, you decide that you need an alternative method to cap your potential costs.

 

When you look at a chart of organic corn prices, you can see that they are poised to break out. A combination of robust demand and the…

Membership is required to view the rest of this post.
Click here to learn more and sign up for a free 7-day trial!

Blog

03.01.2024

Cold, Winter Weather Impact January Soybean Crush

Cold, Winter Weather Impact January Soybean Crush

**Bob Lane was out of the office today and will return on Monday, March 4, 2024.**

U.S. soybean crushing volumes totaled 195 million bushels in January, the USDA reported on...

03.01.2024

Week Closes with Active Gulf Market

Week Closes with Active Gulf Market

Used cooking oil (UCO) traded as low as 39.5 cts/lb into the Gulf market with bids and offers heard in a wide range over the last 24 hours. Offers...

03.01.2024

Animal Proteins – Friday

Animal Proteins – Friday

The market was quiet today with no changes. 

Looking at the monthly averages in February, the markets were mixed in terms of price direction with intra-month volatility seen. 

Latest Tweets