#1 Rule of Cash Marketing: Win the Basis Game with Futures and Options
Take your knowledge of the Grains Markets to the next level. Equipped with our Risk Management Kit, our guides will help answer many of your hedging questions and help you discover the potential opportunities in hedging grains.
Last week Friday, we took a look at a few markets that had pronounced trendlines, stochastics and 20 day moving averages worth taking a look at. Today, lets take a look at a few BEAR flags that have formed over the past week!
Basis Trading is a strategy used by elevators (and some farmers) looking to take advantage of favorable basis prices by exploiting the difference between the cash and futures. Grain elevators buy and sell grain all year around. When elevators make commitments to buy corn from farmers on the local market, elevators will also sell futures close to the cash delivery date to hedge themselves.
Grain Basis Trading is a very effective strategy for both Elevators and Farmers with on farm storage.