That's the age-old question for farmers. If you have production certainty and can price-up minimum yield estimates with some certainty then you're crazy not selling at least some physical or swaps. I prefer SWAPS when Aussie basis is relatively low by historical standards, as it gives more scope for catching some added value (although that's absolutely not the reason for using SWAPS but if timing aligns then all the better); but perhaps more importantly, in the case of a domestic drought, basis will skyrocket here and you'll likely be buying the physical at a higher basis than CBOT futs, which is why it's often an idea to sell SWAPS this far out, rather than the physical. And at the other end of the spectrum, i have plenty of far west and Mallee clients who wouldn't dream of selling forward until it's in the bin and i completely understand that.
You're right though, the hedge funds will look for any reason to create volatility and if the US/FSU stays dry...
