this will happen

+bull and bear scale update

This will happen, somewhere. Maybe in your market? With inverses in corn and soybean spreads, some buyer(s) will start buying grain off a deferred futures before everybody else. If you are a farm, or merchant, make sure when comparing bids you are comparing cash prices.

Below is the corn futures settlement recently:

Below are two fictitious bid sheets side-by-side in a local market

Who has the best bid for April?

Acme grain buyer calls and says, “I got a 6 over bid for April delivery.”

You say, “Wow, ABC is -.12, lets do it, write me up 10,000 bushels.”

Do not only compare basis bids. Always compare cash-to-cash on bids. Acme is +6 over the July board for $5.45 cash for April delivery. ABC is -12 under the May futures which is $5.46 cash for April delivery. ABC’s -12 cash bid is the best bid. But it takes “merchandiser math” to figure it up.

There will be buyers doing this soon if not already, be very careful, pause, and figure up the cash-to-cash comparison. (Its implied you compare freight differences between locations as well, for this example, assume the farm is equal distance to each location).

Bull and bear scale is updated for the week. Read at your own risk. Have a good Sunday evening.

-cw

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Grain Marketing Stack is a platform for grain marketing ideas. The readership is responsible discern and verify the proposals at their own risk. Grain Marketing Stack aims to provide a platform for exchange of grain marketing and merchandising ideas. Grain Marketing Stack does not endorse products, companies, employers or services of guest writers or claim responsibility for guest writers ideas proposed on this newsletter. Great ideas covert to action. Read and verify all ideas and data at your own risk before taking action. Grain Marketing Stack reserves the right to publish or not publish any guest submissions.

Cullen Wilson works as a grain buyer and resides in South Dakota.  Grain Marketing Stack is a side project where Cullen proposes valuable topics to grain marketers and merchandisers. The opinions stated in this newsletter are not that of his employer or affiliates. You may contact him at cullenjwilson@yahoo.com Follow him on twitter @sanegrain .

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This newsletter expresses the views of the author as of the date indicated and such views are subject to change without notice. The author has no duty or obligation to update the information contained herein. The newsletter is being made available for educational purposes only and should not be used for any other purpose.
Copyright © 2021 Cullen J. Wilson. All Rights Reserved. Information provided is general in nature and is provided without guarantee as to results. The information is not intended to be, and should not be construed as, trading, financial, insurance, legal, or tax advice. The author, its subsidiaries, and affiliates disclaim any liability arising out of your use of, or reliance on, the information.
Your grain marketing and merchandising situation is fact dependent and you should seek the appropriate advice.

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