|
NEND | Great question. One I hope gets answered.
I've watched this over the past 4 years, especially as harvest is approaching. It seems to signal how basis will improve after harvest pressure is off. Last fall, for example, the spread between MNPLS cash (I believe it is called the "spot" price, or terminal price) and the nearby futures was between $2.40-$2.65/bu. Local basis was -$.40 to -$.55. I had calls from the elevator right after harvest saying that basis is now -$.30 and you better take it because basis is going to widen again.
Well, I held off fixing basis on my futures fixed contracts until late December, where most bids were $0.00 to +$0.25, mainly because this strategy played out in 2022 and 2023.
The spread between cash and nearby futures has now gone down to roughly $2.00, and we are back to a -$.25 to -$.30 basis.
I pointed this out to the marketing dude from Iowa State this winter at a meeting. He was surprised that the spread was that much and commented that the market is not functioning correctly (a lot more fancy words than what I typed here).
I hope the experts can shed some light on this phenomenon. | |
|
Actual marketing question - Minneapolis Wheat
