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Callao Missouri | I'm not sure if I screwed up or not. I have an 8k bu basis contract at the river for November beans at -5 cents. The current basis for nov is -20 but has been higher.
My problem is I am not sure the price is going to get to a point that I want to sell before the end of Oct when I need to price the bu, or role the contract. Rolling a basis contract is 2cent fee, no big deal. However what I did not take into account or know about is the carry is going to be tossed on as well. For example today they would have wanted to charge me 2c + a 20c carry to role it a month. Their current basis is -20 for dec. Now figures could have changed a bit since 9am this morning.
My plan was originally as follows harvest the beans, bin them, deliver at my convenience, collect a 70% advance for cash flow needs meanwhile rolling it till price improves. However a 20 c carry charge is quickly going to erase any market gains.
After following Ag Talk advice on separating cash & basis, I feel that I have made a grand screw up. I need forward looking strategy ideas please
I'm leaning towards trying to find someone looking to deliver beans in nov, and give them this contract. Would that be ethical?
Thanks Jon | |
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Need advice on a strategy to proceed with a basis contract
