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Northeast Nebraska | Anyone have anything to say about these?
For example, I sell corn to local e-plant for Nov delivery at -.25 and lock in the basis. Marketing company buys July futures the same day and charges me .05 for handling the transaction. When I deliver the grain, I get 70% of the contracted price, while the marketing company holds the other 30% to cover margin. I can sell the July futures anytime I want or roll to next month for .02
Pros - I get rid of corn without paying storage. Lock in what I think is a good basis for fall. Get some operating money.
What are the cons?
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Extended Pricing Contracts - Pros and Cons
