Largely due to great weather in South America, soybeans have steadily declined every day since their high on Dec. 5 losing nearly 65 cents. However, there is still plenty of time left in South America’s growing season. If there is a weather issue, $10 is possible again, if good weather continues, sub $9 could be likely.
Setting basis on beans
Many farmers just concentrate on the cash value of their crop when selling, without realizing the three major variables that make up that price — futures, basis and carry. All three of these variables actually move independently of each other, and the most profitable marketing plans take into consideration each separately to maximize profit potential. Basis is often discussed as something farmers should be considering when selling their grain, but often the practical applications and detail in understanding how to actually do that is not provided. That’s a shame, because having a basis strategy as a part of a farmer’s overall marketing plan is important in optimizing profit and minimizing farm operation risk.… Continue reading