Near-north Ontario, French River | Elevators are caught in a bind, and are lowering the basis to try to limit farmer selling. Talked with our elevators manager today, problem is they have farmers wanting to sell farm stored grain,to generate cash, at the same time the elevators want to ship their own grain ( grain that they have purchased already and had scheduled for feb/march shipment to the end user). Its a problem for the elevators because they end user will only accept 'x' amount of shipments per month. The elevator is now caught in a bind, ship their own commitments and risk pissing off the farmer who wants to ship his grain off farm, or allow that farmer to ship while the elevator defaults on its shipment abligations. The answer is to lower the basis to discourage farm stored grani shipments and allow the elevator to clear its shipping commitments. Our manager stated that a large portion of the commercial dealers are in this bind but he expects much of the problem to clear itself in a week or two as the glut moves through the system. The drop in cbot prices yesterday took alot of pressure off the commercials as farmer selling stopped at least temporarily. He predicted that once the current slug clears, that basis will at least stabilize and or return to levels of the last few weeks. |