Posted by: usset001 | September 20, 2011

2011 Post Harvest plan for spring wheat now on the CFFM web site

I wrote a post harvest marketing plan for spring wheat in late August, but just got it posted on the website yesterday. For hard red spring wheat, the choices this year are straightforward. There is no carry in the futures market to sell. In fact, in mid-August there was a 20-35 cents inverse from the nearby September contract to the deferred March contract.

Prices are high. At nearly $9 per bushel in late August, the cash price at harvest is the highest ever seen, even a few cents higher than 2008.

Finally, a harvest basis of 59 cents under the September is wide, but still much better than the 90 under figure seen last year.

No carry, high prices and a so-so basis led me to price and sell all unpriced bushels at harvest, and to deliver on any grain priced before harvest in the September contract. I did some pre-harvest pricing using the December contract, and on these bushels I am willing to store the grain and anticipate a narrowing of the basis in the months ahead.

Next on the agenda is post harvest marketings plans for corn and soybeans. Like spring wheat, prices are high for harvest. Unlike spring wheat, both markets are showing modest carrying charges into the new year. I am thinking that my best alternative is to sell the modest carrying charges to hedge against lower prices, buy time for a better basis (I am a basis bull), and move sales into the next tax year.


Responses

  1. Most elevators have moved their spot bid to March ’12 futures (at a $.40+ inverse!). A $-.10 March basis is really a $-.55ish Dec basis. You might want to keep your eye on that Dec HTA

    • Troublesome. I have my eye on it.

  2. Ouch, now an $.80 inverse!!


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