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Ontario's middle east | Please do not take what I'm saying as insulting or condescending. There is nothing criminal about any basis level. Skdoog pointed out that very few out there ever tracked basis or even know what it is. There are those who think now that there is a free market that it should vacuum huge gobs of wheat up whenever they want to sell it. That is not how a market works. What you have to understand is that basis is the price that makes grain move. Think of it as a gas pedal, if the market wants more grain, it pushes a little harder when it gets enough it lets off. Right now it's saying close the bins. There will in time, be new players entering the market there. That environment is pretty attractive for an elevator to basis trade in. If you want to layoff some risk, you have a futures market to do that without rewarding that poor basis. The guys that get these basic principles through there head early will have a much easier time then the guys that stand around calling buyers crooks, longing for the good old days when they didn't have to market.
EDIT: post I responded to has been taken down
Edited by Maizeing 12/19/2013 13:45
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Wheat Board
