Course 10 of 20 · Agricultural Commodities Desk Academy

Basis, Carry & Storage Merchandising

Stage C, Merchandising and grain risk. Level 5 of 10.

The merchandising decision: trading the basis and the carry by valuing calendar spreads against storage and financing cost to decide whether to hold, roll or ship.

121 chapters · 11 modules · every chapter one 8 to 10 minute explainer · builds on: Course 04, Course 06, Course 07

Enrol or enquire See the 121 chapters
How a chapter is delivered

One chapter is one idea taken to the point of use

Each chapter covers one idea to the point where you can use it, and comes two ways: a narrated explainer, and a deep dive audio discussion of around thirty minutes that works the same material at depth.

Self-paced throughout, and the same chapters can be taught as a cohort. Chapters run in order: each one assumes only what the chapters before it taught, and capability belonging to a later course is named and deferred rather than half-covered.

Curriculum

11 modules · 121 chapters

Open any module for its full chapter list, in teaching order.

M0 One Parcel in the Bin and Three Things to Do With It Ch 1-11
  1. Harvest Is In and the Grain Has Not Been Sold
  2. Hold, Roll or Ship as Three Priced Alternatives
  3. What the Spread Offers and What the Bin Charges
  4. The One Equation Behind Hold, Roll and Ship
  5. The Cash Price, the Futures Month and the Signed Basis
  6. Storage Tariffs and Interest Arrive as Priced Inputs
  7. Four Seats Facing the Same Three Choices
  8. Why This Decision Returns With Every Harvest
  9. Where Merchandising Stops and Hedge Execution Begins
  10. The Freight Bill Inside the Ship Option
  11. What a Merchandising Decision Must Be Able to Show
M1 What the Market Pays You to Carry Grain Ch 12-22
  1. The Distance Between Two Futures Months as a Price
  2. A Carry Market: Deferred Over Nearby
  3. An Inverse: Nearby Over Deferred
  4. Reducing a Spread to Cents per Bushel per Month
  5. Full Carry and Something Less Than Full Carry
  6. Why the Carry on a Grain Curve Has a Ceiling
  7. Why an Inverse Has No Matching Limit
  8. The Old Crop to New Crop Spread Is Not a Carry
  9. Reading a Grain Curve in a Few Seconds
  10. Liquidity Thins Past the Front Months
  11. Who Is Paid and Who Pays in Each Shape
M2 What Carrying the Parcel Actually Costs You Ch 23-33
  1. Assembling a Carrying Charge per Bushel per Month
  2. The Storage Tariff Restated as a Monthly Rate
  3. Interest on the Money Standing in the Bin
  4. Why a Rally Raises What Your Own Grain Costs You
  5. A Flat Monthly Charge as a Deliberate Simplification
  6. Charges That Fall Once, Not Every Month
  7. Shrink and Condition Loss Priced as a Carry Term
  8. Your Own Bins Are Not Free Space
  9. Margin Cash as Part of What Holding Costs
  10. Why Two Elevators on the Same River Compute Different Carry
  11. A Carrying Charge Built on One Illustrative Soybean Parcel
M3 Setting the Spread Against the Cost Ch 34-46
  1. The Breakeven Spread for One Parcel
  2. When the Carry Is In the Market
  3. When the Spread Will Not Pay, a Hold Is a Basis Bet
  4. Pricing the Hold Against a Named Exit Month
  5. Pricing an Extension Into a Further Month
  6. Pricing the Sale and Movement Today
  7. Valuing the Right to Wait Without Pretending It Is Free
  8. The Three Options on One Sheet
  9. Every Figure on the Sheet Traced to Its Source
  10. How Long to Keep the Bushels
  11. Arranging the Exit Before the Bin Door Shuts
  12. Which Single Input Can Overturn the Verdict
  13. Taking the Decision Again a Month Later
M4 The Basis as the Position You Actually Hold Ch 47-57
  1. What You Still Own After the Futures Are Sold
  2. Long the Basis and Short the Basis
  3. Over and Under Are Positions, Not Adjectives
  4. Strengthening and Weakening Read Against Your Own Bin
  5. Sizing a Basis Exposure in Bushels and Cents
  6. The Interior Basis and the Terminal Basis Are Two Positions
  7. Buying the Basis Inland and Selling It at the River
  8. A Stable Basis as a Working Assumption
  9. The Separate Mandate Line for Basis Exposure
  10. Sign, Month, Unit and Point on One Quotation Line
  11. Who Gains When a Country Basis Strengthens
M5 What Moves a Grain Basis Ch 58-68
  1. Harvest Arriving Faster Than It Can Be Moved
  2. Space Running Out as a Basis Driver
  3. Barge Freight on the Illinois River Inside the Bid
  4. Rail Car Supply and the Interior Bid
  5. A Soybean Processor Bidding for Nearby Bushels
  6. An Export Programme at the Gulf Pulling Bids Up
  7. Farmers Holding Unpriced Grain and the Bid That Follows
  8. Elevator Competition Inside One Draw Area
  9. A Delivery Point Basis and Why It Behaves Differently
  10. The Seasonal Shape of a Corn Basis
  11. Ranking the Drivers by How Fast Each Moves
M6 Measuring the Basis and the Spread Ch 69-79
  1. Building a Basis History for One Delivery Point
  2. What a Posted Bid Sheet Leaves Out
  3. Aligning Bids Quoted Against Different Futures Months
  4. Restating a Delivered Bid as a Bid at the Elevator
  5. The Spread History Beside the Basis History
  6. A Defensible Range for Where the Basis Should Sit
  7. Marking an Unsold Parcel at Month End
  8. Marking the Spread a Hold Was Priced Against
  9. Four Ways a Basis Record Quietly Lies
  10. The Morning Page a Grain Merchandiser Reads
  11. Scoring Last Season's Hold Decisions Against What They Earned
M7 Rolling the Position Forward Ch 80-89
  1. What Rolling Means When the Grain Has Not Moved
  2. Accepting the Next Spread in the Sequence
  3. Rolling the Position Against Rolling the Hedge
  4. What a Roll Earns in Carry and Costs in an Inverse
  5. Rolling Into a New Crop Month Is a Different Trade
  6. The Last Day an Extension Can Still Be Decided
  7. Extending Part of the Parcel and Shipping the Rest
  8. An Extension That Looked Free and Was Not
  9. Reporting the Extension Decisions on a Grain Book
  10. When the Right Answer Is to Stop Holding
M8 Arguments the Grain Trade Has Not Settled Ch 90-99
  1. The Mean Reversion Argument for a Country Basis
  2. The Argument That a Carry Market Pays for Storage
  3. The Argument That the Basis Follows From the Balance Sheet
  4. The Argument That Hedged Storage Is Low Risk
  5. The Argument That Commercial Capacity Caps the Carry
  6. The Argument That the Spread Caps Basis Appreciation
  7. The Argument for Selling the Carry Rather Than Waiting
  8. The Argument That Unpriced Farm Grain Is a Speculative Position
  9. The Argument That Interior and Terminal Bases Converge
  10. Turning a Contested Basis Belief Into Something Checkable
M9 When Hold, Roll and Ship All Go Wrong Ch 100-110
  1. An Inverse Arriving While Every Bin Is Full
  2. A Harvest Basis That Fell Further Than Budgeted
  3. Low Water on the Mississippi and Grain That Cannot Move
  4. Grain Going Out of Condition in a Long Hold
  5. A Margin Call Against a Hedged Hold
  6. The Deferred Sale That Could Not Be Locked
  7. Winning on the Basis and Losing the Load-Out Slot
  8. A Buyer Walking Away From the Deferred Sale
  9. An Export Restriction at the Far End of the Trade
  10. Reading a Recovery That Is Not One
  11. Whether the Move Will Decay or Stay
M10 One Parcel Decided and Defended Ch 111-121
  1. A Worked Comparison, Part One: the Parcel and Its Inputs
  2. A Worked Comparison, Part Two: the Three Options Priced
  3. A Worked Comparison, Part Three: the Choice and Its Defence
  4. A Worked Comparison, Part Four: the Outcome and the Review
  5. Splitting the Result Between the Basis and the Spread
  6. The Same Parcel Decided From the Farmer's Seat
  7. The Same Parcel Decided From a Processor's Seat
  8. Checking Every Open Line for a Reversed Sign
  9. Defending a Hold That Lost Money
  10. What This Comparison Hands to the Crush and Export Decisions
  11. What Basis and Carry Arithmetic Cannot Settle

The brochure gives each of these 121 chapters a paragraph on what it covers and what you can do once you have worked through it.

This is course 10 of twenty

It stands alone, and it is also the entry point to the Agricultural Commodities Desk Academy pathway.

Enrol or enquire See the whole pathway