The Rural Voice, 1985-07, Page 11market. The July/August time frame
looks as though production numbers
will increase slightly, but weights will
decline marginally and this should
make for steady cost prices
throughout the summer. The major
Quarterly Hogs and Pigs Report is
due out on June 21 and average floor
estimates are as follows:
Hogs on Farms Down 2.8%
Kept for Breeding Down 4.8%
Market Down 2.4%
These are estimates only — contact
your broker for the specifics of the
report.
We feel • •HEDGERS • • should
await price rallies to begin hedging.
Historical price patterns suggest that
there should be some potential for
price improvement over the early
summer period. See the "Just a word
about" section for a specific "hedg-
ing schedule."
JUST A WORD ABOUT ...
HEDGING SCHEDULES
Hedging, like other farm decisions,
should not be a haphazard affair. I
try to suggest that hedgers set up a
"hedge schedule," be it for grains or
livestock, that will serve as a predeter-
mined plan for intelligent pricing
decisions. Here is an example table
for a "hog marketing schedule."
July 55% $53.00 - 54.00
August 40% 53.00
October 50% 48.00
December 50% 48.00 - 49.00
February 40% 48.00 - 50.00
Simply, the chart indicates that the
hedger wants to hedge 55% of his
July production in the 53.00-54.00
range, 40% of his August production
in the 53.00 area, etc. One may also
increase hedges by a given amount on
further moves to higher prices; for ex-
ample, increase the hedge by 10-15%
on each dollar move higher over the
initial hedge position. Establishing a
"hedge schedule" puts everything
in black and white, and tends to ward
off that terrible procrastinating
"maybe it will go a bit higher" syn-
drome. By using a predetermined
schedule you will probably never sell
at the very top of the market, but on
average you will do reasonably well.
The information contained herein
is believed accurate; however, Bache
Securities Inc. assumes no respon-
sibility for its use. For specific recom-
mendations and suggestions regar-
ding stop orders please contact your
nearest Bache office.
David Clarke is an Account Ex-
ecutive with the investment firm of
Bache Securities Inc., 376 Richmond
Street, Suite 200, London, Ontario,
N6A 3C7, 1-800-265-1570.
STENDER
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JULY 1985 9