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01-19-2017 01:54 PM
That is a great statement. I stressed over my sons who manage our production all through the big price years..... Now I am relaxed over them.... doesn't mean they will succeed, but they will handle it....
My dad had a great saying...... "You don't learn much of anything in good years"
01-20-2017 02:29 AM - edited 01-20-2017 02:31 AM
i've looked into the basis problem a couple of times, and asked questions. i guess several people (including barnaby at ksu) have
written articles about "convergence" in the wheat market, between cash and futures.
as a prime example that i have asked several times. according to the CME handbook, there are several delivery points for HRWW.
for example one of them is Hutchinson. According to the CME handbook, there is a "set basis" at the delivery points, hutch i believe
happens to be 12 cents under. they would be allowed to charge a 8 cent unload fee......so in theory i could load the trucks
and haul there, dump, call the broker after i dump, sell a contract, and let it go to delivery........but this will never work.
you note that the basis is far from 12 under.
talked to a couple of market people, and this is just unique to this part of the planet...i'm told in iowa and other such places,
the above system works all the time at the delivery points at the river.
the idea of selling a contract in NC beans, and then watching the basis might be good......one of my locals are still at 85 under
on beans while everyone has went to 95 to 1000. i guess to protect yourself from kicking yourself, you could buy a
call, just in case the market goes up........but time value is so high now, maybe wait untill july, when we will have an idea if we
will have a problem or not, and still have time to maybe get a call and ride it up.
i guess my problem with that is, i've never done a contract.......options, yes, we've done those, but the idea of having to make
margin calls, just makes my blood run cold....and have to send in more money as the market goes up....i don't know if you
could "roll" to avoid that, such as sell another contract at a higher price, but i don't know if it would offset the first trade.
i'm starting to miss the days of putting gas in the H or M, or my favorite W6 in the morning, checking the oil and water, and going after it.....
very few in the markets back then, and the only computer then, was huge, took alot of power, and made up of tubes.....
if it was doing trading, man could easy beat it.
ahhhhh progress !!!
01-20-2017 07:28 AM
The state of agriculture that you are so frustrated with is the product of the present administration.
Starting noon today there is a new sheriff in town.
Last I knew, he didn't control the weather either.
And I agree, basis has really widen (got out of hand) for folks without delivery options.
But, I don't miss sitting for hours in a tractor with no cab pulling a planter-to many weather extremes in Iowa anyway.