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straw man

basis question

with a rally probable the next 2-3-4- days do you lock the basis now before the open We hold corn untill JAn -may period and basis will usually get to even or a little positive, as much as 25-30- into June July period. Was looking for even basis by December with last Thursday report, now if we rally 1.00 I don"t know if we get to even at all. Any advice? thanks

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2 Replies
Senior Reader

Re: basis question

Short term basis will weaken as a result of selling.  Long term values should increase.  Watch the spreads.  This corn market is going to act like the bean market of the last couple years with an inverse.  IMHO

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ne 50
Veteran Contributor

Re: basis question

Big red is right....  I set basis on near term corn at the open ... JFM was left open...


I watched what happened with the wheat market this summer and said if the market rises that fast (as the wheat did) and the elevators, or ethanol plants are 'covered' for now the basis will widen until they can sell some into this market...


the question really is how much coverage on feed needs do the local feeders / ethanol plants have.. farmers will wait til the limit ups are over to price nearby corn ... the feedlots / ethanol plants will try to buy as fast as they can with such a bullish market to get coverage on needs ...



just scared that we could see a 1.50 basis on corn before it narrows back to even or 20 under.... so in the nearby the CME could be at 7.00 and locally we're at 5.50.... just like the Wheat market....   basis here by the way widend 10 cents the first day..(.71 under) OND corn... and beans are already 1.04 on the nearby....   so you tell me!

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