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Farmers should watch both basis trends as well as cash and futures market price trends to select the time to price their grain. Refusing to sell grain because basis is considered $5 per tonne too weak could mean a lower cash price at a later date due to a much larger than $5 per tonne drop in futures prices.
Aug 30, 2022 · Basis Contracts are a basic type of grain elevator sale that’s popular with many producers. They allow Farmers to commit bushels to a Buyer by securing a favorable basis price for a specific delivery period. That leaves open the futures portion of the grain contract to be set later when “board” prices (hopefully) improve.
Sep 15, 2021 · A basis contract allows you to set basis, but leave the futures price open to set later, explains Britany Wondercheck, founder of the Farm Girl Next Door. Thus, your cash price on the contract is ...
- Sara Schafer
- sschafer@farmjournal.com
Dec 11, 2017 · Even with that risk, selling grain through basis contracts should be part of a farmer’s overall marketing plan. “You want to have a wide variety of tools — sell for cash, sell forward, hedge, basis contract on your marketing menu — and you should use those tools when it makes sense,” Hart said.
Basis reflects both the cost of marketing grain as well as the competition between grain buyers, and does not change as often as do futures prices. Farmers should watch both basis trends as well as cash and futures market price trends to select the time to price their grain. Refusing to sell grain because basis is $5.00 per tonne too weak
When you sell a load of grain locally, you receive a price that is different from the futures price. This difference is termed ‘basis’. Basis is simply the difference in value between what the futures market says a bushel of grain is worth and what a buyer will pay for that bushel at their location (cash, spot or daily to arrive price ...
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Sep 29, 2021 · The obvious answer is a strong basis, or better yet, a positive basis, is a clear sign buyers really need grain — which for sellers means it could be a good time for a cash spot sale or to lock in that basis for a future sell. The latter, according to Blue, can sometimes be the most profitable option. He points out when basis is strongest, it ...
