Stinson Dean - Talking Lumber
The Business Brew
00:00
Arbitrage
In lumber, basis is the difference between cash and spot price futures. In a market like lumber, where everyone's chronically short, basis sky rockets suddenly all the time. And it's not easy to transport. Takes lot of man power, fork lifts, flat bed trucks. Compared to filling a grain hopper. It just never seen a train get filled with grain. Just slowly rolls by the grain elevator and it just dumps it in. They got the tracks that go around the elevator. Ha.Ha.ha. That makes sense. What does it cost if i need it to day, versus if i can 60 days? The 60 day carry tells me everything i need to know about the
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