Farmers not selling is keeping prices within tight trading ranges. Now that harvest is over, it’s uncertain how long farmers will hold their grain. Also, corn from Brazil is being shipped to poultry end users in southeast U.S., which is decreasing demand for U.S. corn.
Some people are trying to tie high basis levels to low yields/production throughout the U.S. In my opinion local basis levels are more driven by lack of farmer selling. Remember, end users can’t control the CBOT, they can only adjust local basis levels when they need to in order to get farmers to sell.
My November bean options expired Friday (10/23/15). November is my preferred futures month for hedging new crop before harvest. The following are the results of two different options strategies I had in place.
On 7/22/15 I bought $10.20 Nov calls (the right to buy grain for 35 cents) for coverage on 50% of my anticipated production. … Continue readingRead More »