
Basis Discussion: Farmers who have held grain expecting seasonal strength to sell into when the planters were running were disappointed this year. April/May is most often when highs are made and this year the seasonal was a bust. Cash markets languished and farmers have borne the cost of carry. It goes back to “short crop/long tail”, that when highs are made at harvest, spring rallies melt. I sold out completely in December and did not even carry any gambling bushels into this year. The market had to further appreciate in order to cover the cost of carry and I did not see that happening. End-users do not have their demand needs covered yet to reach the next harvest so it will be a game of chicken between farmers with grain yet to sell and end-users who need it. Time will run out. Farmers who overstay wrapping up their old crop sales could see that grain devalue to new-crop price levels. Our local ethanol plant basis is 85 cents over CBOT off July. They will make another basis adjustment when commercials shift to bid off of September but the cash price may change little. The top end of the range for…