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Dayton, IA | My thoughts if I am a corn buyer. I am guessing any buyer for an end user has goals they have to meet. Example - know where 90% of next weeks corn is coming from, 75% 2 weeks out, 40% within next month. Monday is Feb 1st. I would guess a lot of money needs to be paid out by farmers March 1.
So most end users probably have a good portion of their corn needs solidified through the 15th. If a farmer needs money in their account before March 1 they probably can't play chicken much later then Feb 15 or risk not getting the bushels delivered in time to get the check in their account in time to pay bills.
So are we quickly approaching a time when end users know they don't have to bid up basis because there will be more then enough bushels come in by March 1? Also to compound the issue, if you have a bill to pay that is $5 and corn is $5 you have to sell 1 bushel. If that same bill is due and corn is $3.50, you have to sell 1.4 bu to pay the bill.
So, could we see a lot of basis erosion happen by the end of February due to corn owners needing to pay bills?
I know no one on AgTalk has to sell corn to pay bills, but from what I have seen in posts, everyone on AgTalk KNOWS someone else who needs to sell a lot of corn to pay bills.
Just my thought over lunch.
A.J.
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February Corn Price
