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Cash strategist

Corn

There is a division taking place in the commodity market that is worth noting. In recent years, we have seen a larger split between the futures market and the cash market. 

This is a trend that started with the ethanol boom but has become even more pronounced in recent years. This division has been driven by regional losses of production. 

As a result, we have seen basis incentives paid that are well above Chicago Board of Trade futures to encourage movement. This has made moves in futures less relevant to flat cash sales. 

This separation has also generated unique marketing opportunities. The use of basis and hedge-to-arrive contracts has been on the rise with this market environment. This allows a producer to lock in the two different portions of a cash sale when windows open. 

By doing so, producers could lock in higher returns than a straight-out cash sale may have brought. 

Another change...




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