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Basis contract for dummies
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H3f
Posted 8/27/2024 22:35 (#10869120 - in reply to #10868889)
Subject: RE: Basis contract for dummies


1- No. I suspect you have to have soybeans priced, depends on buyer, most likely sometime in last week of December,usually before first notice day for CBOT contract. Suspect if you want to price in January you will have to roll to March which would give you to late February to price. You should be able to lock price anytime between now and late Dec. If bushels are not yet delivered, the contract is converted to a forward contract when priced. If you roll to Mar and deliver in Jan you should be able to receive a percentage (varies 60-75%, example only) of potential total settlement based on current Mar CBOT price.
2- See above. I am slow, so I like to determine what cash price would be with the Jan basis and then determine what basis would be needed to get the same cash price with Mar contract.

edit: most likely before sometime in last week of December  - Buyer wants to avoid delivery period of contract, so will usually specify X days before first notice day of contract.



Edited by H3f 8/27/2024 22:50
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