12/02/2024 This is More than Just a Trade war

PLEASE REFER TO THE HEDGE AND TRADE STRATEGY PAGE FOR UPDATES!! Corn Basis versus CBOT. Since March corn tested its Oct high and corrected the corn basis where we live has since lost 20 cents bushel, now 10 cents over. Commercials pushed bids past harvest until they got their inventory, they needed to cover cash needs to get them into the new year. Farmers tend to shut the bin door post-harvest and not open it again until the next calendar year. That gets them into the next tax year but taxes may not be an issue given short net income. Most like to take the holidays off so commercial grain activity slows during December. On the export side, many foreign buyers, concerned over 2025 trade uncertainty, made US purchases to get transactions on the books to get ahead of threatened tariffs and other risks. That flurry of domestic and export trade has likely been consummated in the cash market as shown in the weakening basis. The dollar shot up during Oct-Nov so that a currency premium to be paid for US grain/soy was created for export purchases. Dollar strength put a lid on the CBOT price recovery from the August…