Death comes to us all. Life's but a walking shadow | I was doing some research on the Dec to Mar roll and made up these charts for myself. Maybe they can illustrate what can happen. Every year is different but you can see that most years the spread between the Dec and Mar in late Dec disappears sometime between Dec and when the Mar contract expires. That spread is usually 10-15 cents so if the additional basis advantage is say twenty cents it will mostly gone by then unless you are careful. On the other hand if you have the courage to go all the way to March sometimes you can win. Whomever does a basis contract with the producer is betting the producer will get scared and set the price at the wrong time.
At least that's how I see it.
PS: I put the trendlines in so that I could visualize how the spread trend goes. They don't have any special validity beyond that. Where I've extended them it is speculation on my part (aka- a visual aid)
Edited by 1234 11/29/2015 16:36
 (Dec04 to Mar05 roll-page-001.jpg)
 (Dec05-Mar06 roll-page-001.jpg)
 (Dec09-Mar10 roll-page-001.jpg)
 (Dec13 to Mar14 roll-page-001.jpg)
Attachments
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 Dec04 to Mar05 roll-page-001.jpg (61KB - 65 downloads)
Dec05-Mar06 roll-page-001.jpg (82KB - 68 downloads)
Dec09-Mar10 roll-page-001.jpg (88KB - 64 downloads)
Dec13 to Mar14 roll-page-001.jpg (103KB - 65 downloads)
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Basis corn contract
