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Red River Valley | The first people I new that used it started in 1991 ( I think would have to go back and see if I have any records from that time) In 1991 the July /Dec. spread was Inverted by about 27 cents at one time in early spring some guy's had realized that July/Dec almost always went to a carry so you had these guy's selling falls harvest in the July futures month and as the market realized that it had ample supplies of corn to get to harvest they bid carry into the market to make sure that somebody besides them carried the old crop into the new. this same system work again in 1992 and 1993 by this time everybody and their dog had heard how the first adapters were picking up around .35 - .40 with this easy as pie HTA and roll marketing plan by 94 the Inversion was down to flat and the HTA and roll work for about 7 or 8 cents but in 95 it kind of backfired as everybody was selling into July and then being forced to roll out to dec. and the market knew it had its main seller caught short so it inverted into the close off July and hung some boys for .25 or so cents which would not have been bad but instead of paying the piper they decided to try to roll their way out of a bad plan, second mistake. to add to it prices had risin a little and instead of biting the bullet they decided to sell their corn out under from themselves and roll the HTA's one more year well guess what the market again smelled blood in the water and Inverted them again and then just went crazy with a short crop and a way oversold market.
I know some outfits that netted less than .25 a bushel on corn in 96 and or 97 most of the elevators that knew extracting all of the pain from the farmer in one year let them roll half of there .25 cent corn to the next year and soften the hit somewhat.
an ugly experience and if I were ever to get wind of a lot of guy's doing this again in the future I would run from any and all marketing plans that would allow it.
and yes there is a least one plan that will allow you to do this type of marketing plan at this time
Edited by Tara Farms 7/2/2015 21:50
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July 4th Corn price reversal.
