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| Understand this, they are not going to speculate buying naked futures just so they can pay you a higher price. The burden of that is on your shoulders. They will adjust basis to maintain profitability. Verasun is the precedent for what can happen when an Eplant speculates. They will hedge bushels committed to make them whole when they grind the contracted corn at some point in the future. That’s how they manage their risk in a nutshell. Roughly speaking, for every 2 1/2 cents increase in corn price, they need wholesale E to go up a penny to hold their money together. Do you think a packer is gonna buy corn futures so they can raise their bids accordingly to make sure the feeder doesn’t lose his hind end? Just ain’t gonna happen.
Edited by Boone & Crockett 5/24/2019 13:50
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