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SC Iowa | Let's not compare apples and oranges....if you are wanting to buy cash corn for nearby or forward positions because you like the basis, and you cannot sell the ethanol, you are either going to hedge it or be long the corn......
ddg's----depending on what market you are selling ddg's into, you can either use corn as a hedge (if primarily selling it as wet feed into cattle biz where it's priced as energy) or you can use a matrix of corn/bean meal to value the protein portion if selling into a market that places value on the protein content
ethanol/unleaded gas......use RBOB and write a basis contract IF you have a bias on a variety of factors.....I heard of some ethanol contracts written at the peak in summer of 2008 at a basis of 75 off RBOB.....considering that RBOB went to under a dollar in winter of 08/09, that put the value of some ethanol at less than 25 cents per gallon.....oh my
the "hedge" is to simply not take flat price risk on the corn if you are buying it and cannot lock up a margin.....so you sell corn futures against the corn you are buying, and wait for the wheel to turn....
We got about six loads of corn in from one guy today and will likely have another start on Tuesday ahead of next rain system...
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At What Price...
