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No life left in old crop, don't be so sure.
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jpartner
Posted 8/1/2015 10:51 (#4710910 - in reply to #4710792)
Subject: RE: No life left in old crop, don't be so sure.


Maizeing - 8/1/2015 08:04 If the commercials own a lot of corn and therefore getting what they need, I'm not sure that makes the market bid higher so they can get more than they need. I suspect from here on out to harvest we see basis threads on here saying basis is collapsing, while others are seeing it ratchet up nicely. This will speak more about geography than price discovery IMHO. The fact that the U-Z spread maintains a nice carry, tells me the market is getting enough corn. Cash traders are not to concerned about holding inventory into new crop without the threat of an inversion eating there lunch. Like I said a week ago, the corn deficit areas should see the basis follow that spread right into harvest, unless of course Ray's cohorts are completely oblivious to the current and up coming supply distribution issues..... wouldn't put my money on that. Ray probably can't comment too much on that but I bet they have or are working on a plan to deal with the situation and just letting it happen and bidding like crazy on the back end probably aint plan A.....

Maize,

  I am not smart enough to understand all the ins and outs on the basis especially, but here, the basis for July corn went from -.22 FOB June 15 to -.61 FOB around July10th,  is back to -.17  today.   And we are not in a corn short area in anyway.    New crop will likely be record, and there is plenty of old corn around I am told...

In one way it worked. By raising the basis, the end users slowed the movement of grain by people wanting to sell, but not willing to let it go at -.61.  Now, they will pick it up for -17 under, but the amount the end users write the check for is lower than what you could have gotten at -.61. So, they were successful, and even though the basis has gotten tighter, their "net" is less.

 

 

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