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| #1. Correct, You can lock in futures price at any point between now and delivery day. Some places actually let you deliver Jan 2nd and wait till Jan 30 to price. Ask you end user.
#2. You can roll a basis contract, but you'll get the difference in basis. Say you roll to march, which is. 00 you'll gain 9 cents, BUT lose the difference in jan- march futures. You need to look at Futures and basis and do the math to figure out if the roll pays or not. They will also most likely be fees to roll, 1 or 2 cents.
#3 yes, your 100% correct.
#4 monster crop will typically show up as better numbers in the futures as time goes, IE 25 cents better march, vs Nov. Futures is a fuction on a national, even world wide scale.
Basis is a function of local grain movement and you need to look at them as completely different aspects.
Localy if you have a large crop coming and need to move bushels, a basis fixed contract set mid summer isn't a bad idea because basis always goes to crap at harvest. If you have room at harvest you can always roll it to Jan or march and probably make a few cents.
HTA work if you've got bins. Set the Nov/Dec futures in the June time frame, wait till harvest pressure and crop size is known. Once the carry comes back in during harvest, roll the HTA to march, may, June. Whatever time frame works with your budget.
Edited by Brahamfiremen 8/27/2024 20:23
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Basis contract for dummies
