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June 6, 2023 |
Stored grain strategies in an inverted market
Stored grain strategies in an inverted market
Ag Marketing IQ: Make the decisions necessary to lock in profits and take charge of weather-driven markets.
The July corn market fluctuated on Friday between $5.81 and $6.10, showing a 30-cent rally from the lows. It's important to pay attention to the grain calendar as the July contract will soon expire. Elevators and end users will soon be trading against the September contract. Currently, there is a significant 70+ cent difference between the two contracts.
Take a look at the markets and determine what basis will have to do to give us what we have today. To achieve the current prices, basis numbers for the river and ethanol plants need to be around $1.00-$1.20 above the September prices. One strategy to consider is to sell old crop corn and then repurchase it using a September $5.60 call option.
