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Looking for help with a Basis contract.
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mojave
Posted 4/19/2018 16:23 (#6719802 - in reply to #6719263)
Subject: RE: Looking for help with a Basis contract.


NE SD
I can only relay my experience that it is etched in my brain from experiences over the years NEVER to roll basis. Even though i try to live by that I took some bad advice with 2016 crop sold in 2017 and ended up rolling all the way to dec and had to sell on the last day before dec expired and it ended up being a penny above the low. OUCH! It still hurts a little. So IMO that is exactly why its not a good idea to roll basis. A good basis contract can quickly turn into a bad basis contract and you may still not be in a better futures position. It can work but usually doesn't. However, this year is different in that we have declining would stocks and this crop might get started later than normal and there is debate on how much bean acres will increase and corn will decrease. If you do it, I would go to July giving you til late june to market it and tell yourself you will not roll beyond that. Also think about the fact that you have the cost of interest etc to consider in the meantime. In reality its prolly costing you more like .15 to roll so...consider that. Can we run that much before end of June? Im sure others could give better advice. This is just my opinion. Good luck!
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