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Crop share arrangement, I'm the LL
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dpilot83
Posted 3/2/2024 13:10 (#10648332 - in reply to #10648152)
Subject: RE: Crop share arrangement, I'm the LL



Zooks4Life - 3/2/2024 11:16 Not sure what local basis means can you help me out?


Basis represents the difference between the cash price and the futures price at the destination your grain is delivered to.

There are areas in the USA that probably are more than $1 positive vs the May contract and there are likely places in the USA that are more than $1 negative.

This means the cash corn price in the USA might range from the $3.20 range to the $5.20 range.

At 200 bushel corn this is the difference between something like $640 of gross income to more like $1,040 of gross income. Makes a big difference in how much gravy there is to increase the landlord income. If a guy is in a traditionally high basis area he might be willing to give the landlord a larger share of the gross income because there is more gross income to cover expenses.

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