Posted by: usset001 | April 1, 2015

Finished marketing the 2014 spring wheat crop

wheaticonThe basis for HRS wheat has been surprisingly strong, and that’s good news for someone who decided to sell the carry in the spring wheat market. In late August, I made the decision to store wheat and sell the Jul’15 Minneapolis wheat contract, which was trading at a 34 cent premium to the (then) nearby Sep’14 contract. You can see my 2014 post harvest marketing plan for wheat here.

The basis at harvest was 30 cents under the Sep’14 contract, or 64 cents under the Jul’15 contract. I sold the carry with the hope that 64 under the July could narrow to option price the July by spring of 2015. I got my target basis plus some – the wheat basis is currently 15 cents over the nearby May’15 contract, and about 11 cents over the July contract – that’s a 75 cent narrowing of the basis from late August to late March. Wow!

The good news is that 2014 is history. The bad news is that I have yet to start on 2015. All I’m asking for is one good rally from current levels.


Responses

  1. You never know a rally till its over…..D


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