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Tidbits, Corn Carry, Broilers & Ethanol, Markets & Rain Days Update 8/31/23

Corn Carry


Carry is the return storage. In the futures market, it is measured by the spread (price difference) between a pair of futures contracts. Capturing the carry is a major profit center for commercial grain handlers. Back in the day when farmers stored 30,000 to 50,000 bushels max, managing carry did not have the possibility to make or cost farmers a lot of money.

Things are different now. Not only do some farmers store hundreds of thousands of bushels, the price of all commodities are 2 to 4 times more than they were 30 years ago and interest rates are much higher, which makes storing grain more expensive.

Now that HTA contracts are widely used, a farmer gained a valuable tool to capture carry without a futures account.

For example, after the crop was made last year, March 2023 corn never traded more than 8¢ over December corn and that was only available for four days in early August 2022. Note the chart:

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