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| I typically don't do a lot of hedging with a broker, but I have started growing Hard Red Spring Wheat for seed production for a local seed dealer. This means I can't just call the elevator and hedge the bushels as I want, pricing is based on dec futures at time of cleaning, whatever.
So I would like to buy Dec 7.00 puts for .30 on MGE to put a floor in until fall on wheat growing in the field. Called my broker that i use sometimes and they suggested using Chicago wheat because it has much better liquidity and MGE didn't even have puts trading farther out than Sept.
My question is, is this a standard practice in hedging spring wheat? I don't feel great about hedging a totally different kind of wheat than I'm growing even if they are somewhat related.
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Hedging HRSW in Minneapolis vs Chicago
