Hedging Wisdom from the Next Generation

Not every young farmer is chasing the top. Some are studying volatility curves, managing risk with surgical precision, and quietly outperforming the loudest voices in the room. One of them is this week’s guest on Hedge Heads.

Market Breakdown: From the Ground Floor Up This week, Jon interviews ThetaFarmer, a young, fast-rising producer known for sharp analysis and blunt commentary on X. With Ryan out on vacation, it’s a raw, unfiltered deep dive into what hedging really looks like for the next generation—and why it might be time for the rest of us to pay attention.

The Modern Farming Startup Problem

Getting started in farming isn’t just hard—it’s capital-intensive and often impossible without family land or a financial lifeline.Theta’s journey began with a $25K loan from his parents—not for a tractor, but to open a trading account. He paid it back fast, thanks to a disciplined, risk-aware approach that stands in contrast to many newcomers chasing easy wins.

“Most guys start looking for a silver bullet… and end up trusting the loudest voice in the room.”

Learning Curve vs. Emotions

College classes helped him understand the math—but real progress came from trading his own money.He stresses that it takes three solid years of real exposure—different crops, unexpected moves, and at least one market that doesn’t behave—to understand how markets actually work.

“You need to see something that’s never happened before to really grasp what markets can do.”Tip: If you didn’t trade wheat in ‘08–’09, you haven’t seen it all yet.

Risk Management Is Everything

Whether it’s options, futures, or bin management, Theta is clear: it's not about being right—it's about managing risk.He goes into detail about how he knows when to exit a trade before he enters it, why soybeans are better for options strategies than corn, and why margin calls should never be funded out of your own pocket.

“Implied volatility is low? Get long. It spikes? Get short. Know what you’ll do before you need to do it.”

2025 Market Outlook: Policy Over Weather

This year, it’s not about the weather.It’s about tariffs (April 2), lapsed biodiesel tax credits (45Z), unknown shipping rules, and a late March USDA report that could shake things up.

“We’re not trading a weather market—we’re trading a chaos market.”He sees soybeans as vulnerable and corn as a maybe—but only if policies change.

Strategy: What He Actually Does

Default Mode: Short options (especially corn calls), but never in large size
Tool of Choice: Futures + options, with seasonal trend awareness
Favorite Setup: Buy long-dated bean calls when implied vol is low and sentiment is terrible
Management Tip: Use alerts or reminders when you’ve captured 80–90% of your expected premium—don’t let winners turn into losers

He even joked about building an app for it. (We’re listening.)

Structural Challenges in Agriculture

This conversation wasn’t just markets. It was a critique of the industry.

Lack of Reliable Info: “It’s a good old boys’ club. If you're not in, you're out.”
Farmers vs. Reality: Too much pride. “Just because we grow food doesn’t mean the business deserves to survive.”
Policy Hope: He’s one of the few willing to publicly support carbon pipelines. “It would be ethanol boom 2.0.”

Where to Start If You’re Lost

Open a small trading account
Sell one corn call in May or June—just watch what happens
Ignore headlines and hype: “Read headlines, you’ll sell papers. Follow them, you’ll lose money.”

Final Thoughts: Build Your Blend There’s no one-size-fits-all. Your hedging strategy should match your cash flow, your bin situation, your marketing comfort level, and your risk tolerance.

Diversify: Futures, basis, bin management, spread trades, and options
Size matters: Small trades beat big regrets
Find someone who wants to help you learn—not just sell you something

This episode is packed with strategy, skepticism, and straight talk. 🎧 Listen to Hedging Wisdom from the Next Generation → [Listen Here] 💬 Got questions for ThetaFarmer? Hit reply or message us on X.