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Ontario's middle east | What users are paying now and what they will have to pay during harvest are two totally different things. Apples and oranges if you will. You should think of basis as " the price that makes grain move". I will make a general statement that won't be true for all areas but is for many. Farmer selling is slow, so end users are not gaining ownership therefore have historically strong new crop bids now trying to make grain move. So we have a Mexican standoff, staring each other down. IF farmers do what they say now and bin the crop, it won't be moving and basis will rise to move it. However, if the board were to rise as you suggest, the flat price oriented sellers(farmers) may move lots of grain tanking the basis. I will be pretty surprised if a lot of areas don't tank basis for a little while at least, as some grain always changes hands at harvest and DP bushels may limit upside potential. Areas with a real poor crop....all bets are off if space is not an issue. Good luck. | |
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