Once an LDP is taken, you immediately establish a long cash position, which carries the same risks as being long futures. In either case, you will lose money if the market goes lower.

To offset this risk you can simply turn around and immediately sell the crop. However, Mike Kvistad, vice president with Benson Quinn Commodities, in Minneapolis, suggests a few other strategies to take a little more out of the market than what's immediately available.

Sell the cash carry. "In this scenario, a farmer retains ownership of the grain, but writes a forward contract for delivery at some point in the future," points out Kvistad.

He says that delivering in the future, even at harvest time futures prices, can net significant extra profit. In 2000, the payoff at harvest for contracting into the future was a futures price gain of 10-40 more than the nearby Chicago Board of Trade soybean futures contract.

Sell futures. This strategy is attractive when the basis is especially weak at harvest. By selling futures, you protect yourself against a downward move in the futures while still retaining the opportunity to benefit from an improvement in the local basis.

Sell cash carry or futures and buy a deferred call. This strategy protects your price while it allows you to benefit should prices rally into the winter. If prices do increase, the call option tends to gain in value, providing extra income. If prices tank, your price is protected and you're only out the premium for the call option.