Hard to justify selling too far out from current harvest at...

Hard to justify selling too far out from current harvest at current forward price levels. Unfortunately the basis can only really be fixed very close to harvest so is only safely fixable if you have confidence on both physical production and quality. Increasingly the market seems to be rewarding forward sellers who take the basis risk off the buyer's hands.

Derivative based hedges (ie any to export markets) become risky when prices are trading around average or below in Chicago's historic price ranges. The reality is the USD could collapse anytime and so too could the Aussie. Probably won't but would we be surprised if one or both did? Very hard to set targets without help from TA.

A lot of producers now focussing on what they can control for the next crop and that is costs. An Aussie denominated cost base is looking pretty good at the moment. Lock these away ASAP because new inventories coming in will be more expensive, reflecting the current weaker Aussie dollar.

But in saying all this we have had opportunities to sell forward at significantly better prices (back in November December 2012 for wheat).

And always at the back of anyone's mind (well mine anyway)who uses futures markets is what happens to your hedge if your broker is collected by any credit crisis or the emergence of an unworkable out of the money hedge book? You may be in the money on paper but as happened with MFGlobal, you can lose your position and the credit you initially used as margin to establish a position. Any future based hedges I establish are through my bank, Rabobank. Are they immune from a credit crisis? Still can't answer that question but I am somewhat reassured they are largely lent to farmland rather than 'non productive' assets like houses and commercial property.

You don't really want to have ANY hedges in place if prices are marginal for profitability with average crop yields. Time is your friend and cross your fingers for a crop failure somewhere in the world.