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| Dub,
You are long the crop so that is your "long". The short or "hedge" would be placed in the month that returns the most carry. If the futures spread tightens this would mean the nearby has gained. You are long the nearby via holding the crop. You can gain with the futures moving higher and the board improving. Problem with KC wheat is no VSR which will make any gain in the nearby mostly comming from basis. The grain hedger needs 1. Money, 2, Time, 3 Space | |
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wheat basis
