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| Not right away. Competition for storage income exists and at some point building more of my own bins becomes more attractive...even with higher steel price. What does happen relatively quickly is a smaller gut slot . Wider carries are a good thing for anyone who owns space. But one has to own the grain in that space to capitalize.
That is why CME continues to respond with solutions that in theory will reduce the occurance and length of time the cash market spends at big basis unders.
Basis ownership /cash ownership is how one makes money in a carry market. Wider carries increases the opportunity but also makes getting the grain purchased across the scale a priority.
Commercial storage rates ultimately will widen a bit over a few years. But the revenue side of the commercial P and L in carry markets is driven by onership of cash grain as early in the season as possible. | |
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Question for Rod@night
