SEON | illini81 - 9/22/2010 18:28
to go back to the original question, why let the elevator make money on the farmer....
Yes, thank you. :)
This is all great information, but I seriously doubt that my local elevator is paying for a ship and moving my grain to Yemen. I rather believe he has a contract with someone (ADM perhaps) to deliver "X" tonnes of grain FOB the great lakes port and that is the end of his involvement. Getting it to that port is not a big deal I can't imagine. I have trucks and I have two ports within 100 miles.
I was (and still am) wondering:
1. What allows him the right to deliver to that port (i.e. who is he dealing with). I suspect, in order to deliver directly to port he probably needs to commit to a certain number of tonnes, but I don't know.
2. What basis is he getting from whomever he is dealing with.
On the day that I booked my basis with him at $ -1.45 FOB my field, the Grain Farmers of Ontario were offering a basis of $ -.91 FOB the port. Therefore, it would seem that I am paying him ~ $800 for every 1300 bushel truck load (give or take) to pick it up at my place and move it to the Port after it's dried. Not a bad deal really, but the devil is in the details.
However, I was to discover that he and the GFO were getting a positive basis to deliver, it might change the situation somewhat. |
who buys the wheat?
