northern edge of north central Missouri | grower3 - 2/27/2024 20:22
For someone who has old crop corn and/or soybeans in their own bin are there any prudent strategies to move the grain and maintain ownership? With corn, selling cash and buying futures looks risky to me with having to overcome the carry to break even. Beans however have little to no carry. What would be the downside to selling cash beans and buying futures vs sitting on them for awhile yet? You might lose basis appreciation but would have cash. I don't really need to hear woulda coulda shoulda I just want to discuss reowning on paper vs continued storage. Yes I have some and no I sleep just fine.
Sell cash and buy futures in May or July depending how much time you want to have. With May you have until late April. With July you have until last days of June. Need a hedge account. Must maintain margin money in your account. Will buy and sell in 5000 bu increments as one contract is 5000. (There are mini contracts but I don’t know anything about them. I think similar just more per bushel to place trades)
Or…..sell on basis only contract. Take about 3/4 of the money at delivery and let the elevator fund the margin.
No hedge account needed.
In either case you decide the moment to price or set the futures. Best to have an order placed in either case.
Only thing worse than in the bin scenario is you won’t capture the carry if any. And of course your basis is set. But no spoilage or further shrinkage. |
Reowenership
