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Longcreekfarms
Senior Contributor

+70 basis in the east

Here it is early march and I've found out that corn is plus .70 in my area. I just finished hauling last years wheat and beans. Planning on sticking close to the cattle for a bit as calves are starting to hit the ground. I might sneak a few loads of corn down the road as time allows though Smiley Wink
There was an excellent corn crop in my area in 13. Everyones bins are full. Chicken houses are big around here. Is beef so high priced that poultry demand is driving basis up this much?
A friend just forwarded 14 crop at 5.33, but he has no storage either. I prefer to have it in the bin and sell it afterward, but it rarely all fits either. Whatever doesn't fit has been my gambling bu. With a current basis this strong, should I forward some corn for this fall on a strong day, or ride it till harvest as usual?
Thanks!
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8 Replies
KY_TOBDirt
Senior Contributor

Re: +70 basis in the east

Longcreek if I could get plus .70 here, I would lock that in on everything I had left
in the bins, deliver it, and price later!
Sounds like there trying to get you guys to cut the welds on them bins!!

I'm also surrounded by chicken houses, Purdue - 21 miles away, Tyson - 10 miles,
Purdue is even on cash corn, Tyson plus .20 at today close
The kicker with Tyson is 2 loads a day, and most of the time you have to in line by 7:30
to get that. There top drag is junk, the leg only got about 60% of the buckets on it,
it takes about 17-18 minutes to unload 1000-1050 bushels. and they only receive corn
between 8am - 3pm Its amazing what a guy will put up with for extra .20 cents.

Back to your topic. I'm assuming that .70 is for cash corn. The 5.33 your friend sold, what was the
basis on it - .40 to.45? (guessing) were even to minus .15 here for fall.
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Shaggy98
Senior Advisor

Re: +70 basis in the east

If you are at levels to lock in a profit, why not lock in enough to cover the following years costs? If prices fall your bills are paid, if prices rise you've still got some gambling stock, if prices are near the same that means we didn't have anything drastic happen this year.
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Longcreekfarms
Senior Contributor

Re: +70 basis in the east

2 years ago, I received 7.92 at harvest. Last year was 4.46. I moved most of my 2012 corn at 8.18 last June. Corn went to a full dollar basis at that time.
Just wondering why basis is so strong for having this abundance of corn. My total average of 182/ acre was not the only farm with a good yield. I'm guessing as Ky said, the bins have been locked since we all got spoiled by high prices and are holding now.
I'm kind of limited on my trucking, all these chicken places are an hour south of me, so might as well call it a 3 hour lap to load and unload. Time is a factor in when you're a one man show. Partly why I usually haul beans and wheat in feb. March is reserved for calving and top dressing wheat.
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rayjenkins
Veteran Advisor

Re: +70 basis in the east

Longcreek,

 

I'm guessing here a bit since I don't really know all the factors in your market.....

 

What happens in your market if corn is short in the truck market?? Can they bring in rail corn?? What rail lines and what size trains??

 

It is possible they are caught up in all of these rail logistics and car cost snafus to the point the rail corn cannot be counted on for delivery when they need it right now...

 

thus, they have upped bids in the truck market to originate more corn

 

sounds like you had a big crop, now a big basis opportunity.....time to move the cash and be long calls or futures if you bullish corn futures.......congrats for being in a good spot

 

Ray J

Hobbyfarmer
Honored Advisor

Re: +70 basis in the east

Not a luxury we have here in South Podunk Country.

 

Grain has been on the move since Jan 2 around here and seems to be in overabundant supply.

 

Basis on corn lost another 5¢ yesterday afternoon is now -28.

 

Beans also seem to have misplaced a nickel too, -60.

 

Lots of trucks been running, finding one to help haul is a week to 10 day wait.

 

Being in the office of the largest local buyer when prices hit 13 with phones non stop ringing with willing sellers makes one wonder what is left after the last few days of $14+ bids. Buyers must be getting their fill for awhile. Seems to take 20 to 30 days for them to really want to be back in the market again.

 

All those converted cow pastures and hay fields must really pour out the beans?

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Reno31
Frequent Contributor

Re: +70 basis in the east

Well here in WCMN we are -.85 basis on corn, one of the worst basis I have ever seen. To much light test weight corn without a home. Everybodys full and all the farmers want to haul, not a good situation.

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Longcreekfarms
Senior Contributor

Re: +70 basis in the east

Ray, they mostly depend on rail corn from the west, but buyers have told me they prefer local grain because the quality is so much better. No idea why, maybe it's been bitten by too many augers? They will grind it anyhow, so I don't see the difference.
What I've seen is about 30 cars dropped at each chicken feed location at a time. Most of these are independent feed mills that sell the feed to the grower, but some are a all-in-one business like George's chicken. Thanks for the positive outlook guys, I'll be on the phone with buyers come Monday.
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hanktbd
Senior Contributor

Re: +70 basis in the east

Long, I think the quality problem comes from being bitten by too many blenders rather than too many augers.

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