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S Illinois | They didn’t know anything about government payments.
Two options when it comes to free DP. They need grain but have pushed basis to its limit to fill that demand so much so that they will start to lose money and will use DP as last ditch effort first before pushing bids. If you have old crop, make an offer of say 10-15 cent above current basis bid as a way to tell if they need the bushels.
Or the more likely scenario is they know is being long old crop basis is on the clock. They know that new crop availability is only 4 months away and that basis will get hit hard. So any grain they buy today has a short timeline to be resold.
For example if they are at say +20N, it’s roughly +0CZ. Historically that would be a strong bid for Sept-Oct. So they aren’t wanting to bid up grain and fill space with old crop corn at +0CZ.
Elevators focus on basis, spreads, and return to storage space. They don’t care about government payments or CBOT price other than how it affects those previously listed areas of focus. | |
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Sdrp 2nd round
