Strategies to Lock in Milk and Feed Prices- Dave Byers

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Dave Byers presented this during DAIReXNET's August 18, 2008 webinar on Surviving High Feed Cost.

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Strategies to Lock in Milk and Feed Prices- Dave Byers

  1. 1. Strategies with Future Corn, Soybean Meal and Milk Prices Dave Byers [email_address] Galax, VA
  2. 2. Bull/Bull Market <ul><li>Someone who thinks market prices will rise </li></ul><ul><li>A period of rising prices </li></ul>
  3. 3. Bear/Bear Market <ul><li>Someone who thinks market prices will decline </li></ul><ul><li>A period of declining market prices </li></ul>
  4. 4. What Lies Ahead? <ul><li>The BIG QUESTION in the financial markets is to know, </li></ul><ul><li>People want a financial “Crystal Ball” </li></ul><ul><li>What will be the price of corn, SBM and milk </li></ul><ul><ul><li>3 months </li></ul></ul><ul><ul><li>6 months </li></ul></ul><ul><ul><li>12 months </li></ul></ul>
  5. 6. What Lies Ahead? <ul><li>Nevertheless, there are systems that attempt to predict </li></ul><ul><li>Two main schools in the financial markets: </li></ul><ul><ul><li>Fundamental Analysis </li></ul></ul><ul><ul><li>Technical Analysis </li></ul></ul>
  6. 7. Fundamental Analysis <ul><li>Looks at economic factors, known as fundamentals </li></ul><ul><ul><li>Dollar </li></ul></ul><ul><ul><li>Acres coming out of CRP </li></ul></ul><ul><ul><li>Number of ethanol plants coming into production </li></ul></ul><ul><li>In short, it examines the forces of supply and demand </li></ul>
  7. 8. Technical Analysis <ul><li>Looks at the price movement of a commodity and uses this data to predict its future movements </li></ul><ul><li>Extensive use graphs of data to “make invisible visible”--called chartists </li></ul>
  8. 9. Key to Technical Analysis <ul><li>Identifying a trend </li></ul><ul><li>In fact, technical analysis can be summed up in the saying, “The trend is your friend.” </li></ul><ul><li>Future price movement is MORE LIKELY to be in the same direction as the trend </li></ul>
  9. 10. Technical Analysis <ul><li>Something that has always fascinated me </li></ul><ul><li>In recent years, I have found it a useful tool to increase profitability of dairy operations </li></ul><ul><li>I send weekly commodity updates dealing with corn, soybean meal, and milk to clients and other interested individuals </li></ul>
  10. 11. Bullish alignment “ Technical buy” signals
  11. 14. Interest in Commodity Reports <ul><li>[email_address] </li></ul><ul><li>No charge--the price is right </li></ul>

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