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Tidbits, Pre-hedging, Export Sales, Markets & Rain Days Update 9/22/23

Pre-Hedging


October Options Expire today, it will impact the prices at least temporarily.

Pre-hedging: In the grain business, pre-hedging is a grain buyer selling futures contracts on Friday afternoons before the CBOT closes to hedge the quantity of bushels he expects he will buy after CBOT closes Friday afternoon and before it reopens the following week. Pre-hedging is a market force to remember every Friday during a harvest season.

Today is the first harvest weekend that pre-hedging is likely to occur for corn and beans. It is early harvest, so pre-hedging will not be significant today, but as harvest picks-up, remember to consider the weekend weather and harvest progress to get a handle on what the pre-hedging pressure might be on a harvest Friday. If they pre-hedge too many bushels, they will be buying them back Monday morning when they get to the office. If they did not pre-hedge enough, they will be selling Monday morning.

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