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| Agreed…my zero chance was relative and perhaps a bit combative to the Guarantee of 5.00$. Sure stuff happens that we can not foresee making zero chances and guarantees worthless…as they should be. Can Cz go to $5 sure…Can it go to $7…sure.
In the context of this thread and the inputs to price as we see them today one can rationally calculate that neither 5 nor 7 is a realistic target.
History explains at the end of the day price is a function of the stox to use ratio of the commodity in question. Simply, how much do we have vs how much do we need. Kinda weeds out the wet spots, the hail and wind events etc. Last USDA number…like it or not have stox to use at 11.4 with a season average farm Px of $4.20. Which in my mind implies a Seasonal futures valuation of $4.50 .. Feeling like that may be a dime too low.
What to watch?
Does the market earn the carry? CN is $4.14 tonight. CU 4.24. On 9/1 is the nearby contract at $4.14 or 4.24? Typically carry market don’t earn the carry and the hope for better prices remain that…hope… while the owner of the crop continues to eat the storage costs, risk, and interest expense. A market that earns the carry , has underlying demand. A market that consumes the carry continues to drift lower.
Are spreads tightening…or not? Easiest way to buy hedged longs ( hedged grain)is to tighten spreads and / or improve the basis. Think about that…If the market inverted between U/Z…carryover in theory should go to zero as it would be mathematically irrational to hold grain through an inverse. When the carry narrows , It reduces the longs cost of carry and invite him to free up his capital by selling bushels.
What’s the basis telling you when -25 the N becomes -35 the U?
Anybody have any lines at the probe?
Lastly…..Begrudgingly….If the market still can’t get the grain bot and its exhausted reasonableness in the spreads and in the basis…it buys futures. The markets last choice and what everyone else watches and talked about on forums. Frankly…the least valuable piece of price information as it relates to market structure.
Watch the signs other than simply the board or cash bid to focus in on the markets behavior and undertow. I get…at the end of the day we need to sell cash grain at a cash price. Let the markets behavior help with the timing decision for that sale.
Edited by Rod@night 6/26/2026 04:22
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Guaranteed $5 corn this fall
