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Red River Valley | I understand it's not about marketing it 2,3or 4 times It having a longer window to market it once in.
corn and wheat both have a long history of building carry in the out years beans not so much so because of the SA production and the fact that such a high percent of beans are exported.
so lets stay with corn here - Today corn is worth $4.19 nearby but $4.37 in Dec. and $4.55 in the July 16 then it's back to $4.37 in Dec. 16 A July/ Dec. inversion of .18 this Inversion in almost every year comes out and goes to a carry and before this rally that just took place there was some carry all of the way out to dec.17.
About a month ago some here were talking about the fact that the Dec. / July spread might be worthy of a look see at that time It was trading in the .27 range today it is .18 if we keep ralling it will get to about .10 is my guess. but understand that once the threat to the crop is priced in that spread will widen again.
So armed with this Info one can set a marketing plan and by hedging it on the CBOT you can give yourself a lot of flexibility so today you would sell the board in Dec. At 4.19 and as carry goes into the market you could roll those sales to July at say fro say .28 making this sale $4.47 hold it into the July until it builds carry to the next new crop of say .15 making that sale $4.62 then roll the carry to July 17 at .28 again deliver at that time for $4.90 now you are only selling it ONE time and letting carry work for you but you do have to have more than a one year time frame to do this marketing.
July of 17 today is trading at $4.53 and If you used an elevator to do a straight July 17 HTA you would receive $4.53 less about 12-15 cents in HTA fees or $4.40
should you do all of your bushels this way NO but If you understand where the risk are in this marketing plan than by all means one could do some sales as some level this way.
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July 4th Corn price reversal.
