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Ontario's middle east | Yes, I think you follow me now. Generally long the basis in a carry and short the basis in an inverted market. The tricky part is the transition between the two. Thats kinda where we are at. Commercials hold grain when the markets pay us, we sell grain with inversions.
It makes more sense when you think about it this way; basis is strong at the start of an inversion for the same reason we have an inversion >>>>more demand than supply. Eventually the supply gets rationed and basis is a big number that no one wants to own it at anymore, leaving us looking at a cliff. ie: think the bean market right now
Edited by Maizeing 1/28/2014 14:39
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Maizing
