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Maizeing - 11/15/2015 00:18
If those spreads keep coming in they are going to quench basis as well because commercials can unwinding spreads and getting paid storage for grain they didn't have to store
I got lost in this last sentence. Spreads keep coming in? Does that mean expiring near 0? There hasn't been much, or any, carry in beans since September. How is anyone going to unwind and get paid?
I know you've beat a dead horse, but I'm not sure I've ever fully understood your spreads/basis/futures sequence. So if you could shoot holes in this. For beans at least, spreads were bullish/narrow preharvest in September and continue to be narrow, basis then unusually strengthened through harvest and continues to strengthen, and that is where we are now. The narrow spread and strong basis being bullish indicator for futures.
When you say "if those spreads keep coming in they are going to quench basis as well", leads me to believe my timing is way off, or I have it plumb backwards. Or quench basis means stronger basis yet, with harvest winding down.
Long Story Short....Show Me....Please. LOL
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Maize or Ray
