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2016 spring soybean rally caught many by surprise: Part III

Just when outlook seemed to be the darkest November soybeans began to rally, creating opportunities for growers.


The outlook for soybean futures couldn’t have been much darker when growers were making their crop plans early in 2016. Some analysts were saying the harvest price could have a six in front of it.

Instead, soybeans began to rally, helped by higher oil prices and some central bank decision-making. Soybeans began rising from $9 to $9.50 to $10 and on to close to $12 a bushel at one point.

Growers working with Steve Scott, president of Scott-Agri, Little Rock, Ark., began booking soybeans at $9.50 and bought November $10 calls for around 20 cents per bushel. When prices continued rising, they were able to benefit from the higher prices while having a floor under their crop.

Scott talked about how growers can use a risk management strategy of buying puts and selling calls to help market their crops at the spring board meeting of the Agricultural Council of Arkansas in Forrest City.


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