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Red River Valley | Back in 2008 when DNS wheat was on it's incredible run, had a farmer that I had worked with through the years that was sitting on 70-80K bushels of wheat on the farm. When wheat was in its topping formation, it moved to a +$ 8.00 basis or whatever crazy number it was at had heard from a floor source that the traders that were short had instructed their personal to go out and buy 50 cars of cash wheat no matter what it cost and get them on the rails to the floor for delivery.
I called my friend up and told him that they are making a move to acquire the physical wheat to place it into delivery position and it was probably a good time to dump his bushels, his statement to me was that he was going to get holding out until he could get $2 million for his 75K bushels. I stated don't think your going to get it as soon as they get the 50 cars the squeeze will be off because nobody has any use for $25.00 wheat. He stated the reason wheat was at $20.00 is because they know there is none left and they would be paying a lot more to get a hold of the physical wheat they needed. I stated " what do you mean you have half of what they need sitting on your farm why would you think they can't get a hold of what they need.
He simply stated trust me they will pay.
needles to say they achieved their goals without his wheat - and he ended up selling it for Under $10.00 per bushel -- the moral of the story is that their is always grain around it may very well be mis- allocated but it is there.
In 1996,2008,2012 all three years I could have took a 50 mile drive from MY location and found more bushels in bins then anybody thought possible.
2012 got the contacts to move grain from West to East the process of doing that is happening much sooner than 2012 | |
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Carryover
