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| if you(tomorrow) set a basis level for "Jan" as you say, then that is 3.5 months from now, so you will not technically be able to deliver on that Jan basis contract for that same 3.5 months. If the grain is in your bin then you pay yourself the storage(interest, condition risk, etc) until you can deliver in Jan. Likewise your elevator has the right to charge you a storage fee until your grain is actually delivered on the basis contract(in this case Jan).
However, if you(tomorrow) set a basis level for the "CASH(delivered tomorrow)" delivery period, then the grain is immediately deliverable and thus they would stop the storage charges and simply apply the bushels to your basis contract. Good idea, however you really need to weigh the difference in basis levels as well as the futures carry between the delivery periods(and thus futures contract months).
hope this helps!
have a safe harvest everyone! | |
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Quick ??
