Re: Why are basis so neg compared to 5 & 15 yr averages
Not the answer you want to hear, but I'll go all Palouser on you.
The futures are disconnected from the cash due to the massive long position in Chicago. Funds own like a Bil bushel of wheat, so this buying has held the futures above the low levels it should have reached based upon global prices. Egypt's last tender would be indicative of this. So, to make up for over-invested in and thus overvalued futures, the basis has to be much wider than normal.
This is not to discourage you from holding old wheat, rather, it is the condition that is required to start building the base for a recovery rally. The commercials are buying the wheat with HUGE carry built in to the cash market vs. the futures hedges. They can and will store it for a long time, thus the supply is removed from the cash market andprices can recover. Old as time itself.