EC Nebraska | H3f - 2/22/2024 11:33
I believe the elevator does take a long position, sorta in your name as any gains or losses on that contract are yours not the elevators. I do know ownership of the grain passes to the elevator so he can sell it and does not have to have it in inventory. Also, I assume this is grain that has been delivered and not a basis contract for future delivery. If the grain is at the elevator a partial payment bases on price at contract day can be received. If the futures position gains value you will receive the rest of withheld base plus the futures gain. If futures position loses value, you will receive less of the withheld payment and may have to pay elevator.
Yeah, that's the way that I was thinking it worked. I'm talking about bushels that were delivered at harvest, and then were placed on a basis contract under the July board to avoid setting a price and avoid storage charges.
So the elevator takes control of the bushels when the basis contract is signed. When/If the elevator moves those bushels, then it takes a long position on the July board. When the producer decides to price those bushels, then that long position is liquidated.
Knowing how farmers usually work, we can assume that most of those bushels that don't get priced in the next couple weeks (to pay taxes or whatever) will stay on the board until June. |
So Met With The Banker Again
