Know the Number Before You Negotiate
You cannot negotiate what you cannot measure. Basis is simply the local cash bid minus the relevant futures price, and it follows recognizable seasonal patterns in most locations — widest at harvest, typically narrowing into winter and spring as space frees up and the elevator needs to attract bushels.
Keep a simple record: every week, write down your elevator's bid and the nearby futures close. After two or three years you own something more valuable than any market opinion — your local basis history. Seasonal charts of the futures side help with the other half of the picture. When the elevator offers a basis, you will immediately know whether it is generous, normal, or poor for that week of the year.
Where Your Leverage Comes From
- Sell needs, not surpluses. Basis improves when the elevator is short bushels against a sale — a train to fill, a processor bidding. Asking what they are looking for, and when, tells you when your grain is most valuable to them.
- Competing bids. A second buyer — another elevator, an ethanol plant, a feedlot — changes the conversation even if you never haul a bushel there. Know the freight math so your comparison is honest.
- Delivery flexibility. Offering to haul in their slow month, or to deliver on short notice when they are covered, is worth cents. Ask for them.
- Volume and consistency. Reliable, large, on-grade deliveries are worth a better basis over time. Say so.
Separate the Two Decisions
The cleanest negotiating position comes from splitting the price. When you argue about a flat cash price, you are mixing a futures opinion with a basis negotiation, and the elevator — who watches both all day — has the advantage. Instead, handle futures on your own schedule (a hedge, an HTA, or a priced sale when futures suit you) and negotiate the basis as its own conversation: what is the basis, how does it compare to last year this week, and what will you give me for this delivery window?
A five-cent basis improvement on 100,000 bushels is $5,000 — every year, for a conversation. If you manage the futures leg yourself through a broker-assisted account, you come to that conversation with the futures already handled and full attention on the negotiable piece. Futures trading involves substantial risk of loss and is not suitable for all investors.