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| So without storage the only way to sell carry is sell it before harvest to dump at harvest if you understand. In most cases Commercial storage will eat up any market carry from after harvest. If your going to get a board (CBOT Price ) Carry in corn of say .24 cents to July the elevator will want at least .03 per month well if you harvest your corn in Nov. guess how much at .03 a month that will cost you yep about .21 or .24 cents so they get the carry and you pay Interest on money although there maybe some basis appreciation to be gained it will also have to offset Interest charges. But if you sell in July before harvest for Dec. delivery than the spread or carry from that point until harvest is earned carry and about the only way you can earn it.
Seasonal to me is another word for FEAR as the crop is in it most dangours production time frame the market will pay a premium to somebody to secure the product it needs but fears may not be their the fear of not knowing what that crop will be is greater than the fear of knowing the crop is smaller once the know results are out the fear drops and usually so does the fear premium. So you have to be willing to sell that FEAR. For the record most weather scares run about 3 weeks from start to finish with most of the gains being in that last week of the market do some last longer YES but one needs to understand where one is within a weather market the hard part is when does it start ? I have found over the years that two to three weeks after the farmers with good deep soil start crying for a rain is about the time it will start. and then wait a week to ten days and then start with a 1/6th sale you might get three sales off within this one time frame so be prepared.
lastly if selling in times of fear (weather) is almost impossible for you than you really need to be disciplined enough to by some well out of the money calls in the area where the spring seasonal lows happen ( for this info gooogle soyroy seasonal charts ) and they will help you pick a spot to buy option value.
as for basis it will be a dog fight without bins but I would not set basis in the middle of a fear rally because the elevator usually takes some of that rally to cover their fear.
again the Peanut gallery has spoken | |
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