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Co-Ag Farm
Recently there have been many questions about wether or not an HTA contract is feasible right now....so let's find out. Starting today, I sold 1 (5000bu) September 2014 Chicago (ZWU14) futures contract at 6.14, cash today was at 6.85. That gives me a starting basis point of +71. Today's nearby basis is +1.18. If the Septemeber basis runs to anything close to that number it will be great, and will add to what would have been a 6.85 cash sale. However, if the basis goes the other way it will be taking away from what would have been a 6.85 cash sale, and if it goes negative it will really hurt!
I'll also do the same with a December 2014 Chicago contract (ZWZ14) sold at 6.29, cash at 6.95 with a +66 starting basis to see is the later months fare any better or turn out worse.
*UPDATE* Today I locked the basis on the DEC HTA contract at 1.53 positive basis, giving me a cash price of 7.82 far surpassing what I could have sold the cash for when I started the hedge. So in this case, yes the HTA contract worked again, even while starting at a positive basis. Would I do another today? No. Today's basis levels are much to high in my opinion with much more downside risk than upside potential.
I'll update weekly to track how this HTA contract is working out.
Take a look at the Co-Ag Farms J.V. Link to find out more.
Chicago futures closed up 3. Wheat might find a little support this morning on better than expected export sales, but for the most part the trade continues to struggle as Russian suppliers dominate the global market. Occasionally we are seeing some Ukraine and Romanian wheat winning some bids as well. For the most part though, it remains the same song and dance... Cheap supplies continue to pour out of the Black Sea region inflicting more price pain on the market.
Pea & Lentil bids - 05/06/14 - Green/Yellow Peas and Pardina's are slightly up. Regular Lentils are limited. PL480 tenders - pricing continues on the low end.
