Trader Mindset How a hedger looks at the grains and livestock markets
Oct 13, 2025
Join Chip Nellinger, founder of Blue Reef AgriMarketing and a seasoned expert in hedging and risk management, as he shares insights into the grains and livestock markets. He discusses the vital role of education in hedging decisions, the impact of commodity funds on market dynamics, and the significance of seasonality and weather in price risks. Chip also delves into livestock risk protection strategies and the effects of tariffs on market behavior. With practical advice for producers, this conversation is a must-listen for anyone interested in agricultural markets.
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Producer-Focused Hedging
- Chip focuses mainly on producers: medium-to-large row-crop and cattle operations seeking to protect downside risk.
- Producers are inherently long the physical and use hedges to lock profitable prices and limit losses.
Match Hedge Tools To Client Comfort
- Educate producers on tools and tailor hedges to comfort with margin and risk tolerance.
- Use straight futures for low-cost hedging or puts to avoid margin calls when clients prefer no margin exposure.
Pick Strikes By Risk And Charts
- Strike choice depends on perceived downside risk and current price versus cost of production.
- Combine technical analysis and Commitment of Traders data to advise optimal strikes and timing.
