Basis values on the rise

first_imgShare Facebook Twitter Google + LinkedIn Pinterest By Jon Scheve, Superior Feed Ingredients, LLCWhile planting progress continues across wetter parts of the Midwest this week, it still seems unlikely much more than 90% of corn acres will eventually get planted by the end of June. The market rationed demand very quickly once July corn exceeded $4.20. Questions will continue throughout summer on how many acres were actually planted and what the potential yields will be. Improving basis valuesThe widespread uncertainty in futures prices is helping to improve basis prices around the country. End users are planning for upcoming production issues this winter by raising bids now for both new and old crop.But it seems that farmers aren’t selling much new crop on this rally. Instead most are focused on pricing grain already moved to end users or sitting in commercial storage. Even farmers with on-farm storage are holding back some of their old crop, so they can use it against new crop sales that were already made before the rally should they not get all their acres planted or if their yields are below normal. Plus, many farmers believe there is enormous upside potential yet for futures, so they are waiting to see where the market goes for some of their old and much of their new crop.This has made procuring corn by end users difficult; therefore, June basis values are approaching the highest levels of the year. New crop basis values are creeping higher too, especially in the eastern states where end users are concerned about getting enough grain sourced.The same thing happened during recent drought years (i.e. 2010 – 2012) when the corn supply was tight, basis values at end users across the country were quite high compared to the last 5 years when supply was more than adequate. Corn basis saleAt the end of April, I was approached by some end users 300 miles away desperately needing corn. The Missouri river valley flooding was preventing rail cars from reaching their usual destinations in Oklahoma and Arkansas, so end users there were looking for alternative locations to source their grain. They had to increase their basis to entice farmers to move corn during planting season. Since I use futures to hedge my grain, I can stay very flexible and move my grain to the highest bidder anytime and anywhere.In the end I received -19 on July futures, picked up on my farm, which was better than any posted local bids when all freight costs were considered. This bid was also 23 cents better than what I received for my ’17 crop last summer. So, while futures price may have been disappointing for the ’18 crop, I improved my overall sales by taking advantage of the best basis opportunity available to me.I sold about 50% of my ’18 production with this sale. I’m holding the rest of my ’18 corn until after harvest because the carry in the market will more than cover my interest until late winter and I have plenty of storage capacity for the remainder of the ’18 crop and all of the ’19 crop I have growing in the field. Plus, I think basis levels will be the same as they are now or maybe better after the new year. Obviously, there is some downside basis risk that I’m taking on by not setting basis at this time, but I’ve noticed the last few years that holding hedged grain as long as possible was the more profitable market strategy. The potential lack of corn supply from the ’19 crop could work to my advantage later this year. Please email jon@superiorfeed.com with any questions or to learn more. Jon grew up raising corn and soybeans on a farm near Beatrice, NE. Upon graduation from The University of Nebraska in Lincoln, he became a grain merchandiser and has been trading corn, soybeans and other grains for the last 18 years, building relationships with end-users in the process. After successfully marketing his father’s grain and getting his MBA, 10 years ago he started helping farmer clients market their grain based upon his principals of farmer education, reducing risk, understanding storage potential and using basis strategy to maximize individual farm operation profits. A big believer in farmer education of futures trading, Jon writes a weekly commentary to farmers interested in learning more and growing their farm operations.Trading of futures, options, swaps and other derivatives is risky and is not suitable for all persons. All of these investment products are leveraged, and you can lose more than your initial deposit. Each investment product is offered only to and from jurisdictions where solicitation and sale are lawful, and in accordance with applicable laws and regulations in such jurisdiction. The information provided here should not be relied upon as a substitute for independent research before making your investment decisions. Superior Feed Ingredients, LLC is merely providing this information for your general information and the information does not take into account any particular individual’s investment objectives, financial situation, or needs. All investors should obtain advice based on their unique situation before making any investment decision. The contents of this communication and any attachments are for informational purposes only and under no circumstances should they be construed as an offer to buy or sell, or a solicitation to buy or sell any future, option, swap or other derivative. The sources for the information and any opinions in this communication are believed to be reliable, but Superior Feed Ingredients, LLC does not warrant or guarantee the accuracy of such information or opinions. Superior Feed Ingredients, LLC and its principals and employees may take positions different from any positions described in this communication. Past results are not necessarily indicative of future results.last_img read more

Google’s Patent Pledge Covers Its Own Ass

first_imgTags:#Google#Open Source markhachman Top Reasons to Go With Managed WordPress Hosting Google’s pledge to back open patents is a typically Google gesture: an elegant combination of genuine altruism, PR spin and protecting its own self-interests.Thursday morning, Google outlined the Open Patent Non-Assertion Pledge, which boils down to one statement: “we pledge not to sue any user, distributor or developer of open-source software on specified patents, unless first attacked,” the company said.Google said that it would place ten patents under the aegis of the OPN, all tied to MapReduce and designed to minimize the computing power of large data sets. Google has previously made those technologies available to developers; the most high-profile example of the MapReduce library is Hadoop, designed to run applications across large collections of low-cost, commodity hardware.Hadoop is licensed using the Apache v2 license, which allows for the modification and distribution of contributed code, without royalty. However, the license applies just to a specific project; the OPN pledge applies to any software, past present or future, that might use those patents. Google also said that the pledge remains in force even if the patents are transferred, which will presumably be apart of the licensing restrictions that are applied if the patents are sold or licensed to another party.But the key component of the pledge is this one: “The Pledge may be terminated, but only if a party brings a patent suit against Google products or services, or is directly profiting from such litigation,” Google said.He Hit Me FirstSo far, the patents that Google included under the pledge are fairly innocuous: there’s simply no way that Google would ever try to enforce its MapReduce patents, not when Hadoop has become such a critical component within the enterprise.Over time, Google said, the company intends to expand the patents covered by the OPN pledge to other technologies, and it’s here that Google lays the foundation for a future opportunity.Two of Google’s most important products are based upon technology that Google open sourced: Google’s Chrome browser and Android. Chrome, based on the Chromium Project, covers both the browser as well as the foundations of Chrome OS. Google’s mobile operating system, Android, was also founded as an open source project, and its pervasiveness as both an OS for phones and tablets – as well as forks like the Amazon Kindle – is based upon Google’s choice of license.But, over time, Google has been sued by Apple, British Telecom, Microsoft and Oracle, among others, who have claimed that the company’s Android patents infringe their own. If Google were to place its key Android patents under the “protection” of the OPN, the company would be able to paint Microsoft and others as bullies. Look, Google would be able to say, we gave the world MapReduce, which is the basis for the Hadoop technology you use to run SkyDrive, Microsoft – and your iCloud, Apple. How can you turn around and sue us over Android? It’s not clear whether Google’s pledge applies on a patent-by-patent basis, so that a suit contesting one patent under the pledge would allow Google – from a public relations standpoint, if not a “legal” one. And this all assumes that Google will take some of its more controversial patents and place them under the OPN, as well.Google is keenly aware of the disgust the software community has for patents, and the sort of restrictive lawsuits that not only tie up potential progress, but also force developers and researchers to constantly protect their innovations. Open-source licenses are a great relief: developers can simply develop, sharing their knowledge and improving their lot as a whole.In keeping with this, Google has elevated the bar for corporate behavior. You can argue that the open-source movement embodied Google’s “don’t be evil” mantra before Google did. (Linus Torvalds released Linux in 1991, seven years before Google was incorporated.) This is the Google of the self-driving car and Google Glass, innovating for all.And there is something to applaud here. It’s just that Google is looking out for its own self interest, too. A Web Developer’s New Best Friend is the AI Wai…center_img Related Posts Why Tech Companies Need Simpler Terms of Servic… 8 Best WordPress Hosting Solutions on the Marketlast_img read more