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| I have a small percentage of my old crop in on farm storage. I was only a few cents away from my sell orders in June and you know the rest of the story.
During the June rally I forward contracted some of my new crop expected production with an average futures price of $4.10 under December Hedge to arrive contracts with local elevator. Normally I would roll them to July/Sept 17 to pick up the carry as I have done in past years when there is this much carry in the market.
I'm considering using these contracts to clean up most of my old crop inventory. These contracts would take care of 2/3 of my old crop inventory. Basis is wider than normal at this time as the merchandisers wait for the farmers to puke up the remaining old crop as the CCC loans come due. Current cash bids are -$.35 to -$.45 at my local delivery locations. My CCC loan isn't due until late October and the way I understand it, doesn't have to be paid back for 30 days depending on when I release it for hauling.
My cash flow is ok through the end of the year. I don't necessary need to sell anything between now and Jan 1st but it would be nice to move most of this inventory before harvest. If I needed to I could still hold all of my expected new crop production but it would be a lot more inconvenient.
I've been mulling over this for a couple weeks now. Any outside input is appreciated.
Thanks, | |
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Old Crop Corn
