This week: Selling in a downtrend, even when prices are below your cost of production.
I have had several calls this week about selling corn on a seasonal rally ahead of the likely harvest lows. This is a tough situation. For many farmers, selling now is selling below their cost of production. However, hanging on and seeing prices move still lower will only add to the losses.
Right now, corn futures are low. However, the cash basis level is good in most areas. I would take advantage of the current good basis and then buy some December corn call options. The at-the-money $3.90 calls for December corn (which expire on July 26) are trading for about 16 ½ cents.