Texas/New Mexico Stateline | tmrand - 10/7/2017 07:49
or an understanding banker. Since I last checked my bank account (that option is out) and as nervous as my bankers seem with regards to the economics of our area anymore,.
Yes, but as long as you have the physical, any reasonable lender should see that the margin will be covered with the grain you have when you sell it for cash.
When there is carry and you sell the futures, the "worst" thing that could happen is the price eventually works it's way higher than your hedged price. But wouldn't that be a good thing over all?!
Using the example of this years wheat, if a person had sold that July 2018 wheat on the futures for $6ish, do we really think wheat will be above that anytime in the foreseeable future? Probably not. Even if by a miracle it did get above $6, the carry you locked in would have still paid for your storage for that wheat until then. Cash price on your stored wheat would cover all the margin.
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Wheat is Cheaper than corn.. again.. edit add: and even SORGHUM!!
