In times of “burdensome” supplies, analysts have been suggesting farmers use the carry.
The deferred months have been paying more than the nearby months, and Angie Setzer, vice president of Grain for Citizens LLC, says there’s usually a problem that happens in carry markets.
“Once the front month goes off, so once the December month goes off, you tend to see the next month in line fall into that old trading range,” she said. “A lot of guys will be putting stuff in the bins trying to capture that carry.”
She said farmers that are looking to store grain should have a plan, because they shouldn’t store it and hope prices improve. She’s urging farmers to have a price target in mind.
“Be aware of what’s going on in the market structure and the likelihood that we could be staying pretty flat as time goes forward,” said Setzer.
Hear what she says could limit basis on AgDay above.