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What is full carry
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Posted 2/11/2019 19:41 (#7314593 - in reply to #7314408)
Subject: RE: What is full carry

Full carry is the mathematical cost to carry a bushel of grain from one CME delivery period to the next. It's best to understand the equation as a daily cost rather than a monthly cost. That way one can figure full carry on any day of the month to any given day in the future.

The equation is simply storage cost in CME registered delivery space plus the cost of funds.
CME storage rates for corn and beans are fixed at 5 cents per month or .0016667 cents per bu per day. Cost of funds is different for different entities. If im long cash, I might use 2%....if im a net borrower, I might use something closer to 4%.
So using 3% on $9.08 soybeans is .2724 cents for a year. Divided by 365 days = .0007463 cents per bu per day.

So full carry for Soybeans March1 to May 1...or any 61 day period is .0016667 + .0007463 X 61days or .147193 cents per bu.

CME delivery storage rates are increasing to 8 cents per bu per month for C and B this fall. That will widen to full carry calc by an additional .001 cents per day.
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