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02
Jun
2016
Increased crop prices create hedging opportunities for risk management
Author: Archie Flanders, Extension Economist

By Archie Flanders, Agricultural Economist

Recent price increases for soybeans and corn bring opportunities for producers to protect profit margins by hedging in the futures market. Prices trending at levels higher than price levels corresponding to current supply and demand fundamentals give price hedgers potential to lock in down side risk by using futures options. The Cooperative Extension Service has added an information section for futures and options markets to its Risk Management website. It is important to understand circumstances to avoid speculating when the intention is to protect price positions by hedging. Contact Breana Watkins at bjwatkins@uaex.edu for more information on price hedging. Risk management information and the Futures and Options Markets section are available at http://www.uaex.edu/farm-ranch/economics-marketing/farm-planning/risk-management.aspx

 


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