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04-30-2017 07:01 PM
Bins are best viewed as a distinct enterprise that you use like your own elevator to capture basis and carry. Assuming you keep it in condition there are solid returns regularly- probably most every year if you have the bushels and the market doesn't invert on you- that doesn't happen often but when it does it is often the same year.
If you want to gamble I'd suggest hedging inventory with some form of option strategy that leaves more upside open- delta hedging, put spreads etc., but you need to understand what you're doing and need to have a point where you'll abandon it if something unexpected happens and it goes against you.
But yeah, I've been driving around the countryside a lot recently and keep wondering how many casino bushels are depreciating inside those bins. No way to know.
04-30-2017 08:29 PM
I think what happened in `95 or `96 with the $5 cash corn and the hedge to arrive debacle has skewed many marketing plans. There have been a very very few times where if you were holding physical grain in late summer, you are in the cat bird seat and everyone secretly wants to be that stud hauling extremely high priced physical corn to the elevator in Parker wagons for everyone to see in August. Trouble is that doesn`t happen often enough that swinging for the bleachers everytime you`re up to bat could send you to the poorhouse.
But like Jim says to ease your harvest with bins and dribble a little in at a post harvest rally when most bin doors have a fresh bead of weld and the farmer $ signs in his eyes, you can make some sensible base hits and probably dry it cheaper than the elevator.
04-30-2017 10:35 PM
it would be curious to know what the shipping cost will be on that load.
I know the Baltic rate has been down.
I would also be curious what "grade" the corn is.
I know when I did my work up, the gulf bid was about $156 us/metric ton, and I think that worked out close to 7 cents.