Back To School Quiz #6

“Back to School with Ed Usset” is a new feature of Corn & SoybeanDigest, in cooperation with Ed Usset and the Center for Farm FinancialManagement. Ed’s challenging and authentic quiz questions are designedto test your grain marketing knowledge, and will help you learn whilehaving fun! Ed Usset is the author of “Grain Marketing is Simple, It’sJust Not Easy,” and is a grain marketing specialist at the Universityof Minnesota.

Questions and Answers

1.

I like to tell producers about the “11^th Commandment” of grain marketing, “Thou shall not hold unpriced corn or soybeans in storage after July 1.” What is the driving force behind this commandment?
- A.
  
  The tendency of basis to weaken from early summer to harvest
- B.
  
  The tendency for new crop futures to decline from early summer to harvest
- C.
  
  Both (a) and (b)
Correct Answer
C. Both (a) and (b)

Explanation
While there are exceptions, the tendency for cash grain prices to decline from early summer to harvest is very strong. This due to the fact that two powerful forces are working against the value of cash grain: (1) the tendency for cash prices to fall relative to futures prices and, (2) the tendency for new crop futures to trend lower.

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Current Version
Jan 16, 2013

Quiz Edited by
ProProfs Editorial Team
Jun 30, 2010

Quiz Created by
Ed-usset

Back To School Quiz #6

I like to tell producers about the “11th Commandment” of grain marketing, “Thou shall not hold unpriced corn or soybeans in storage after July 1.” What is the driving force behind this commandment?

I like to tell producers about the “11^th Commandment” of grain marketing, “Thou shall not hold unpriced corn or soybeans in storage after July 1.” What is the driving force behind this commandment?