USDA S&D today at 11 AM Central.
Andrew asked:
"I see you are saying to make a decision on when to set the basis. By doing this, you are saying there are no storage fees on unpriced grain in the elevator? I just want to make sure I am understanding you correctly. Our local elevator is -65 on bean basis which I would say is pretty average. The last few years it has been slightly lower due to low supply. So, if I were to lock this in at -65 on my estimated production, that will be going to town so I can avoid all storage fees?"
Andrew, there are no fees if you use a basis contract while maintaining a long position.
The futures market risk with a basis contract is the same futures market risk as with grain in the bin, DP, commercial storage, grain bank, or a long futures position.
Here are the characteristics of the various market tools that apply to delivery of grain to a merchandiser: