Death comes to us all. Life's but a walking shadow | In your post below, no. 4058935 you stated, "For the person with on farm storage, we are now just 6 cents away from being able to roll a Dec 14 hedge out to Dec 15 for 50 cents.......now, to maximize the value of that transaction you may either have to carry that corn to aug/sept of 15 and/or sell the corn in spring/early summer of 15 on a sizable basis opportunity in their local markets.......and you can generate cash flow via 1.125% CCC money for 9 months, so a very low cost of carry to start earning back value....
ya know, that is also a strategy that will work nicely should you get greatly reduced acres and/or a mid summer weather problem in 15 as that July/Dec 15 carrying charge would likely disappear, forcing the front end higher and possibly narrowing basis as well.....we call that "being bullspread cash against futures"..... ."
Would you (or somebody else) please outline in detail how this strategy will work with an example?
Thanks in advance. |
Ray Jenkins, with reference to your post below.
