|
|
Post by johnwayne360 on Jan 18, 2012 19:36:31 GMT -5
corn price today 5.68 basis -.25
corn price july 5.77 basis -.28
corn price aug 5.78 basis +.08
corn price oct 5.08 basis-.41
odd..at least to me that basis is positive yet cash bid roughly the same..Why would one month have a positive basis then turn back way negative..Im new at watching basis levels so tell me if im being dumb on this one.
|
|
|
|
Post by Hobbyfarmer on Jan 18, 2012 20:03:57 GMT -5
Aug is the last of the old crop year could be tight supplies by then
Oct is new crop harvest, time take advantage of plentifull supplies of freshly harvested crop that people need to sell to pay bills and bankers with.
|
|
|
|
Post by johnwayne360 on Jan 18, 2012 22:20:00 GMT -5
I get that part..but why the wild swings in basis without much difference in price. Shouldnt basis come up on the previous month? I mean, the corn is supposed to be rationed by prices, so why the big difference in the two old crop months?
|
|
|
|
Post by Dave-ECIA on Jan 18, 2012 22:35:40 GMT -5
Different basis months.
|
|
|
|
Post by Hobbyfarmer on Jan 18, 2012 22:50:42 GMT -5
Harvest in the southern states starts in Aug so the futures are usually softer starting with the Aug futures month.
|
|
|
|
Post by Rich© on Jan 19, 2012 0:29:56 GMT -5
Where in the hell do you take grain that you have a positive basis ever?
There is never a positive basis in NW KS for grain delivery.
I don't know of a truck driver out there that pays a coop to haul thier grain for them.
That's jacked up.
|
|
|
|
Post by Hobbyfarmer on Jan 19, 2012 6:43:48 GMT -5
Like a lot of things in life ....location, location, location.
The eastern corn belt already has a + basis in some areas and harvest is 8 to 9 months away.
last year there was as much as $1.05 difference in soy price between your area (Rich) and Bunge in Council Bluffs Iowa (just across the river from Omaha).
In my own opinion I think that there is a very real chance of a disconnect between futures price and cash by the end of July or first of Aug in my area. In other words ...+basis. It just takes more money to buy what's not out there in quanity. ...just my opinion (guess).
|
|
|
|
Post by johnwayne360 on Jan 19, 2012 7:37:36 GMT -5
ok...now i get it(i think). Since harvest starts in aug in the south, they are expecting to be short of corn up here at that time, hence the positive basis. Doesnt probably mean anything pricewise, at least right now. Initially I was thinking that the price should go higher to cover the shortage. Thanks guys.
|
|
|
|
Post by acfarmer on Jan 19, 2012 20:46:19 GMT -5
Im betting the basis changes to the + side quicker than august in a few months.
|
|
|
|
Post by johnwayne360 on Jan 20, 2012 7:12:48 GMT -5
well it improved another .05 yesterday, so we shall see...
|
|
|
|
Post by Rich© on Jan 20, 2012 14:03:00 GMT -5
I'd like to know how we can't be in the running with the rest of you.
Iowa has the hog houses. Kansas is full of feedlots and ethanol plants.
I still don't see how there can be a positive basis.
If there is a positive basis..... That means someones paying a shitload more money for commodity then its being traded on the board and keeping thier mouth shut or the board would fluctuate to fix it..... Which.... since we are talking about it here..... I cannot see how it would be kept quiet.
Something ain't adding up.
|
|
|
|
Post by Hobbyfarmer on Jan 20, 2012 14:18:44 GMT -5
Our basis here in South Podunk Country went from -10 to -8 on corn but just east of here ...
Decatur IL ADM was +23 spot as of this morning. Decatur Tate and Lyle is +19 spot. Locally(NW Central IL) we are +10 for delivery in March.
The basis for IL ethanol plants has moved 20 cents in just over a month.
....
The president of the System Farsul Carlos Sperotto, announced, on Thursday (19), the first partial data collected by 137 Rural Workers' Unions from RGDS ( gauchos) on losses in agriculture due to drought. The survey said one third of the crop , initially estimated at 25.78 million tonnes ,has already been lost. New estimate now is at 16.905 tons. In percentages, the decline in rice is 11%, 54% in corn and soybeans 36%. The impact on RGDS's GDP will be felt in the billions of reales . At the employment level of the three sectors of the economy, 950 000 jobs are at risk due to the effects of drought.
....
|
|
|
|
Post by wheatfarmer on Jan 20, 2012 16:28:22 GMT -5
Rich if you can work a deal to deliver to the feedlots or ethanol plants I am sure you will find a more favorable basis. Just remember, they will want you to store it until the agreed on delivery date. Without any choice but delivery to the elevator, you are locked to the terminal's basis, which for us is KC, and any basis the local elevator chooses to add to it.
This comes back to the argument, in this western wheat country with few choices, is there enough add money on the table to justify the cost to build storage. In my younger days I thought yes, but after putting numbers together over the years it justs seems to always come out as break even at best.
|
|
Bristol Hillbilly
Hired Hand
Sentinel aka "Bouncer"....Sitting by the door....
Posts: 215
|
Post by Bristol Hillbilly on Jan 20, 2012 17:23:01 GMT -5
I always thought storage bought time. Wheatfarmer why won't storage pay? Couldn't you store out of the field and deliver to a better market later? I'm just asking, don't know the miles you are talking about. I wish I had more storage at times but still need cash to pay bills. I will say that the ethanol plant next store was paying a +.08-.10 basis for cash corn starting back in mid November. I don't ever remember seeing that around here that close after harvest. Never saw it till ethanol moved in.
|
|
|
|
Post by wheatfarmer on Jan 20, 2012 17:39:08 GMT -5
To get a better basis means going somewhere other than Kansas City. The trip to KC is around 260 miles. Can gain a better price at ADM elevator in Saline, ks as opposed to the local elevator but the trucking eats up the profit, plus they get real picky on dockage all the time compared to the local elevator at harvest time. So wheat is pretty well not going to pay.
Milo can go to feedlots or ethanol plants and get a better price. However, most feedlots contract lots of corn locally and want milo only as needed to replace corn. Ethanol plants will take the milo, but the little one 20 miles away wants a gaurantee of at least 10,000 bushels before they will even talk to you. With a long haul to the river or to the gulf, any potential improvement in price versus local price is pretty tough.
Local elevator costs $0.035/bushel/month storage. A good bin system that will have air to keep the grain in condition just don't pay out with that number.
All of this does not include the cost of moving from farm semi to commercial semi. The numbers don't work unless you are rather large.
This is a little long but hope it helps you understand.
|
|
