06-29-2012 09:14 AM
I think the basis eroding, as the price was going up, is a sign that the end users are trying to show us about what they are willing to pay as of right now, or else about at what point more farmers are willing to sell.
06-29-2012 09:15 AM
Perhaps, but many are thinking there will be an abundance of new cheap corn with an early harvest that they can use to fill their late summer needs. Now they are just waiting, waiting, waiting-but it is looking more likely all the time that they took some poor advice. There will be some grain available, but I doubt it is abundant or cheap.
06-29-2012 09:41 AM
What do we know about the amount of grain in farmers' hands? My grain buyer knows how much I have left. Does she know with her other clients, too? Maybe so. It's hard for me to have any confidence in an "on farm storage" number. this will only gets worse as more and more farmers build bins.
06-29-2012 12:51 PM
I'm not sure it's really about how much they're willing to pay, but rather how much they can afford to pay or their banker will allow them to pay. Rumor has it another large ethanol plant in NE will shutdown in a couple of weeks. Of course, crude is up 6 bucks as I type so things are definitely subject to change. It's conceivable demand for corn in 12/13 could actually end up being less than 11/12.
06-29-2012 01:09 PM
Ha.......two weeks ago all I heard was bellyaching that the strong basis was a sign that futures were "mis-priced" and somehow the system was messed up....now, fast forward and we just had a $1.25-1.50 futures rally ---and folks are now bellyaching that basis retreated sharply.....
kinda tough to have it both ways when you have one of the strongest short-term futures moves ever.....
but a few did figure it out and could get 7.50+ if they want to cash out today......
06-29-2012 02:19 PM
I did listen to Ray and what he stated was the obvious. We locked in our last 35K bushels at +$1.05. Today we are in the catbirds seat. Looking back I can't imagine how stupid I would feel if we hadn't locked basis in. About as stupid as not selling $7 corn for multiple years in 08. It's amazing how when things are super bullish you get paralyzed and the marketing plan can go out the window.