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cropsey, il 61731 | Wouldn't you agree in these times of widely variable futures price and not as wildly moving basis, it's kind of hard to get excited about capturing 15 cents when the futures moves $1 and you're making a profit selling. Plus capturing basis gains might be as easy as an elevator basis contract (or delivery point if it works out), but it might only be realized by an option strategy which brings in further risk and cost. I guess I'm saying to many $4 corn and 200bpa isn't a mistake regardless of the basis. Not saying anything is wrong with what's posted, just that psychologically at higher prices there is less drive to take on more risk/effort for what appears to be diminishing returns. Just as an example, I sold some beans for $9.50 rather than pay storage - excellent basis (oddly enough). However the market has moved almost a $1 higher - wiping out my storage savings and any basis gain. I'm not uncomfortable with my sale, but it shows how futures price appears to be king for now (at least in beans). Perhaps when fundimentals start weighing on the market and the excitement is over, there will be more stability and being a student of the basis will matter more.
fwiw,
Pat | |
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5 ways to use basis
