Near-north Ontario, French River | I'm thinking that most elevators out there would be more than happy to make an AVERAGE of .10-.15 across all the bushels handled. Most farmers have no idea how elevators work, they are basis traders and unless they take some risky positions they make nothing off CBOT price swings. I can't tell you the number of times I've heard farmers say that elevators must be making a killing when markets run up, or are the brink of bankruptcy when the markets crash. The reality is its almost the exact opposite. Being basis traders elevators love it when CBOT prices are high, then crash,,,, as the crash tends to increase basis levels( elevator wins) and lowers their hedging costs as margin calls are reduced. |