Posted by: usset001 | October 24, 2013

2013 post harvest marketing plans for corn and soybeans

bullandbearMy 2013 post harvest marketing plans for corn and soybeans are posted here (corn) and here (soybeans).

After a drought induced hiatus, large carrying charges have returned to the corn market. That calls for storing corn and “selling the carry” with the sale of a deferred futures contracts (I chose July). One hitch in this years strategy; the harvest basis for corn is strong – 37 cents under the Dec’13 contract – and the prospects for a much stronger basis in spring are not so good (vs. the last three years, when the corn basis went “overs” in the spring).

Soybeans are frustrating. Carrying charges are inverted, leaving me with a choice between selling at harvest or holding for higher prices next spring. I am a basis bull in soybeans – stocks remain tight and a strong basis (overs?) relative to the May and July contracts should be expected. It’s the direction of the futures market that has me concerned. If South America can produce a large crop, I expect prices to trade sideways to lower. That said, the soybean market has displayed a remarkable ability to trade higher after harvest over the last decade. I’ll sell a good portion of soybeans at harvest and save a few bushels for the higher market scenario.

 


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