@sdelsad/commodity-desk-daily 1.0.10 → 1.0.12

package/covered.md

@@ -2,5 +2,5 @@
 
 Running log. Read before writing a new episode: avoid repeating material, and only make callbacks to episodes listed here.
 
-- **Ep 1** (Tue) — *The Units and the Language of the Desk*: Units: bushel as volume (60 lb wheat/soybeans, 56 lb corn), tonne conversions, cents per bushel, 5000 bu lot, quarter-cent tick, Matif euros per tonne, cwt, short ton vs metric tonne. Quoting grammar: differentials (plus eighty-five) vs flat price, prompt vs deferred, month codes H K N U Z. Desk verbs: bid, offer, hit, lift, done, workable, indication, washout. Quantity language: 5 percent more or less, laycan. Three desk dialogues. Pulse: Dec corn 4.65, Nov beans 11.82, Sep wheat 6.51, Black Sea disruption lifting wheat, Midwest rain weighing on corn and beans, WASDE and Crop Production on Wednesday with trade looking for corn yield 182.4 and soybeans 52.9 (named the report and why it matters, kept brief).
-- **Ep 2** (Tue) — *Flat Price vs Basis*: Flat price vs basis: cash = futures + basis; quoting 'November plus 80'; desk kills flat price via hedge; long the basis (physical + short futures) vs short the basis (sold unowned + long futures placeholder, crusher example); basis moved by freight, quality, congestion, urgency, farmer selling; basis risk as the chosen, analyzable risk. Vocab: flat price, cash price, differential, plus eighty, hedged position, long/short the basis, basis risk. Example: 66,000 t Santos cargo at Nov +80 — board - hedged to zero (~.4M each way) vs +10c basis = ~40k kept.
+- **Ep 1** (Mon) — *The Units and the Language of the Desk*: Units and quoting grammar; three desk dialogues; see glossary. Pulse: Dec corn 4.65, Nov beans 11.82, Sep wheat 6.51; Black Sea lifting wheat; Midwest rain weighing on corn/beans; WASDE Wednesday named with trade expectations 182.4 corn / 52.9 beans.
+- **Ep 2** (Tue) — *What a Merchant Does, and Why Basis Is the Whole Game*: Space/time/form; physical vs paper; hedging kills flat price; basis as the residual; asset-light vs asset-heavy mapped onto the three transformations; ABCD landscape; why a bull market does not enrich a hedged merchant; three surviving risks (unfixed freight, origin basis while accumulating, execution). Worked example: Santos -20 to Shandong +80, freight 60, costs 10, 30 cents = 660k on 60kt; 1 dollar board move = zero, 10 cent basis move = 220k. One broker dialogue on line-ups and river levels. Pulse: WASDE day, went deeper than yesterday by walking the balance sheet chain yield-production-supply-ending stocks-stocks/use and showing why half a bushel of yield matters via the multiplier.

package/ep02.md

@@ -0,0 +1,141 @@
+# Commodity Desk Daily — Ep 2
+## What a Merchant Does, and Why Basis Is the Whole Game
+
+---
+
+### Key takeaways
+
+- Merchants are paid for **transformation — space, time, form** — not for predicting prices. Thin margins, enormous volumes.
+- **Physical vs paper**: a physical desk uses futures constantly, but as a hedge, never as a bet. Buy a cargo, sell the equivalent futures within minutes, and the flat-price exposure is gone on purpose.
+- What remains is the **basis**: the difference between your specific cargo and the futures price.
+- Worked example: Santos beans at futures −20¢, sold to a Chinese crusher at +80¢ delivered, freight 60¢, costs 10¢ → **30¢/bu ≈ $11/t ≈ $660k** on a 60,000 t Panamax.
+- A **$1.00 board move nets to zero**. A **10¢ basis move is $220,000** on that same cargo — a third of the trade. That asymmetry *is* the job.
+- Basis is not financial abstraction: it is vessel line-ups, river levels, protein content and who needs cargo this week.
+- A merchant does **not** get rich in a bull market — the hedge means the flat-price gain belongs to whoever owned it (farmer, fund). Volatility and dislocation pay; high prices merely cost more to finance.
+- **Assets map onto the three transformations**: storage → time, terminal → space, crush plant → form. The large houses run a hybrid of owned and rented capacity.
+- Three risks survive a "perfect" hedge: **unfixed freight, origin basis while accumulating, and execution** (demurrage, quality claims, counterparty failure).
+
+### Vocabulary of the day
+
+| Term | Meaning |
+|---|---|
+| Space / time / form | The three transformations a merchant is paid for |
+| Physical (cash) | Real cargoes under contract, with specs and load windows |
+| Paper | Exchange futures and options — used to hedge, not to speculate |
+| Flat price exposure | Outright price risk, removed deliberately by hedging |
+| FOB Santos | Cargo priced free on board at the Brazilian port |
+| Arb (arbitrage) | The full economics of moving a cargo: buy, freight, costs, sell |
+| Line-up | The queue of vessels waiting to load at a port |
+| Asset-light / asset-heavy | Renting the chain vs owning elevators, terminals, plants |
+| ABCD | ADM, Bunge, Cargill, Louis Dreyfus |
+| Demurrage | Penalty owed when a vessel is held beyond agreed laytime |
+| Stocks-to-use | Ending stocks ÷ total use — the market's tension gauge |
+
+### Market pulse
+
+WASDE and Crop Production land today at noon Washington time. Yesterday the trade was looking for corn yield near 182.4 bu/acre against a current 183. The episode goes one level deeper than yesterday's mention: yield × harvested acres → production; + carry-in → supply; − feed, exports, ethanol and food → **ending stocks**; ÷ total use → **stocks-to-use**. Half a bushel of yield ≈ 45 million bushels — trivial against a 2.1-billion-bushel crop, decisive against the stocks number. That multiplier is why desks argue over a decimal place.
+
+---
+
+## Quiz — Day 2
+
+**J-0 — Episode 2: What a merchant does, and why basis is the whole game**
+
+**Q1.** You buy the Santos cargo at futures −20 and immediately sell futures. Overnight, Chicago falls 80¢/bu **and** the Santos differential widens from −20 to −35. Your boss says "flat price fell, we're hedged, so we're flat." Is he right? Quantify what actually happened on 2.2 million bushels, and say who bears it.
+
+**Q2.** A competitor owns the export terminal at a chronically congested port; you rent capacity there. In a year when trading margins are terrible, whose business suffers more, and why? Frame your answer using space / time / form.
+
+**Q3.** Wheat rallies 60% over six months. Rank these three by how much they benefit, and explain the mechanism for each: (a) the farmer who has not yet sold, (b) a macro fund that went long futures at the start, (c) a merchant with an active book of hedged cargoes. Then name one specific way the merchant could actually make *more* money in that environment — without taking a flat-price view.
+
+*Answer in the conversation to get detailed feedback.*
+
+---
+
+<br><br>
+
+## ▼ SOLUTIONS BELOW — scroll only after answering ▼
+
+<br><br>
+
+**A1.** He is wrong, and expensively so. The 80¢ fall on the futures is genuinely neutral: the cargo lost 80¢, the short futures gained 80¢. But the **basis moved against you by 15¢** (−20 → −35): the cargo you own is now worth 15¢/bu less *relative to futures*, and the hedge does nothing for that. On 2.2 million bushels that is **$330,000 of loss** — half the trade's entire expected margin. Nobody else bears it: basis risk is exactly the risk the merchant is paid to take, and the reason the flat-price hedge exists is to make this line visible rather than hidden inside a bigger number. The trap is the word "flat": hedged means *flat-price* flat, not risk-free.
+
+**A2.** You suffer more. The terminal is a **space** asset: in a congested port, the bottleneck is physical access to the vessel, and whoever owns it collects an elevation margin from every tonne that passes — including yours. When trading margins compress, that asset income is stable while your trading income is not; worse, your competitor can bid more aggressively for cargo because he recaptures part of his own cost internally. The general principle: assets convert a volatile trading margin into a steadier toll, which matters most precisely in bad years. The counter-argument, which is real: in a year of weak volumes, that terminal sits half-empty and its fixed costs still have to be paid — asset-heavy raises the floor and lowers the ceiling.
+
+**A3.** (a) The **farmer** benefits most: he is long the physical crop with no hedge, so the entire 60% accrues to him. (b) The **fund** captures the futures move on its notional, magnified by leverage but with margin calls along the way and no physical to fall back on. (c) The **merchant** benefits least — he is hedged, so the 60% passes straight through him; worse, the same tonnage now ties up 60% more working capital and costs more to finance, and margin calls on the short futures leg consume cash before the physical is sold. As for making more money without a price view: a bull market usually comes with **dislocation**, and dislocation widens basis and spreads. Concretely, the merchant can lean into carry when the curve pays storage, capture wider origin-destination differentials as buyers scramble, or supply prompt cargo to a squeezed market at a premium — all basis and spread plays, none of which require an opinion on flat price.
+
+---
+
+## The episode, in writing
+
+### Market pulse — going one level deeper on WASDE
+
+WASDE and Crop Production land today at noon Washington time. Yesterday the number to watch was corn yield near 182.4 bu/acre against a current estimate of 183. What matters is not the yield itself but the chain it sits in.
+
+Yield × harvested acres gives production. Production + carry-in gives total supply. Subtract feed, exports, ethanol and food use, and what remains is **ending stocks**. Divide ending stocks by total use and you have **stocks-to-use** — the market's tension gauge.
+
+Half a bushel of yield is roughly 45 million bushels. Against a 2.1-billion-bushel crop, that is small. Against the stocks number, it is not. The yield moves the stocks figure by a multiple — which is why a desk argues over a decimal place.
+
+### The merchant is not a speculator
+
+Ask most people what a commodity trader does and they will say: buys wheat, waits for it to go up, sells it. That is almost exactly wrong.
+
+A merchant is paid for **transformation**, in three forms. **Space** is geography: buy soybeans in Mato Grosso where they are abundant, deliver them to a crusher in Shandong where they are needed. **Time** is storage: buy wheat at harvest when every farmer sells at once, hold it, sell it in spring. **Form** is processing: crush soybeans into meal and oil, mill wheat, refine sugar.
+
+Each transformation costs something — freight, storage, financing, processing — and the job is to lock a selling price that exceeds the buying price plus all of it. The margin is thin, a few dollars a tonne. The volumes are enormous. That is the model.
+
+### Physical vs paper
+
+Physical means real cargoes: actual beans, on an actual vessel, against a contract with a real counterparty, a quality spec and a load window. Paper means exchange futures and options.
+
+A physical desk uses paper constantly — but almost never to speculate. Buy 60,000 t of beans and you are instantly long 60,000 t of price risk; within minutes the desk sells the equivalent in futures. If the market collapses tomorrow, the loss on the cargo is offset by the gain on the short. The flat-price exposure is gone, deliberately.
+
+What remains is the difference between your specific beans and the futures price: the **basis**.
+
+### The numbers that make the point
+
+Brazilian beans FOB Santos at futures **−20¢**/bu. A Chinese crusher pays futures **+80¢** delivered. Gross spread $1.00. Freight 60¢. Financing, insurance and port costs 10¢. Margin: **30¢/bu ≈ $11/t**, or about **$660,000** on a 60,000 t Panamax.
+
+Now move the market. Chicago beans rally $1.00 overnight: the cargo gains a dollar, the short futures loses a dollar, **net zero**.
+
+Now move the basis instead. You bought at −20; that same cargo now trades at −10. Ten cents on 2.2 million bushels is **$220,000** — a third of the trade — and the board never moved.
+
+A dollar of flat price was worth nothing. Ten cents of basis was worth a third of the trade.
+
+> **TRADER:** Where are you on Santos November?
+> **BROKER:** Sellers are plus five, buyers are around minus two.
+> **TRADER:** I paid minus twenty three weeks ago.
+> **BROKER:** Different market. Line-up's full and the river's low. Nobody's offering cheap.
+
+Nothing there was about soybean prices. It was vessel queues and river levels. **Basis is the price of logistics, quality and urgency** — physical facts, not market opinions.
+
+### Why a bull market is not a merchant's friend
+
+If wheat rallies 50%, the merchant is hedged: the gain belongs to whoever owned the flat price — the farmer, the fund, the speculator. The merchant earns the same few dollars a tonne, on more expensive inventory that costs more to finance and generates margin calls on the short leg.
+
+Higher prices are not obviously good for a trading house. **Volatility and dislocation** are.
+
+### Assets, through the same lens
+
+Some merchants own the chain — elevators, ports, crush plants, terminals; others rent. Map it onto the three transformations and the logic is immediate: own storage and you can play time; own a terminal in a congested port and you own space; own a crush plant and you own form.
+
+The cost is capital, and in bad years those assets sit half empty. The large houses run a hybrid: strategic assets where control matters, rented capacity everywhere else.
+
+The landscape is **ABCD** — ADM, Bunge, Cargill, Louis Dreyfus — with COFCO, Olam, Viterra and Glencore's agricultural arm around them. Louis Dreyfus has been doing this since 1851, which says something about the durability of the model when it is run properly.
+
+### What survives a perfect hedge
+
+That $660,000 is not risk-free. Three things can still take it.
+
+**Freight.** You priced the arb at 60¢. If the vessel is not fixed and freight rallies $20/t, the margin is gone.
+
+**Origin basis.** You still have to buy the beans. If Santos moves from −20 to +5 while you accumulate, you are buying at a loss against a sale already made.
+
+**Execution.** Demurrage on a delayed vessel, a quality claim at discharge, a counterparty who does not perform.
+
+The hedge removed the risk you could not control. Everything left is the risk you are paid to manage.
+
+### Takeaway
+
+Merchants are paid for transformation across space, time and form — not for prediction. Flat price is hedged away on purpose so the desk can concentrate on basis, freight and execution. And basis is not an abstraction: it is vessel queues, river levels, protein content and who needs cargo this week.
+
+**Tomorrow:** the futures side properly — how a hedge is actually placed, what a margin call does to a solvent trade, and what the shape of the forward curve is telling you.

package/ep02.script.txt

@@ -0,0 +1,70 @@
+Commodity Desk Daily, episode two. ||| 0.35
+Yesterday we learned the words. Today we use them, on the question that defines the whole job. ||| 0.5
+What does a commodity merchant actually get paid for? ||| 0.7
+Market pulse first. ||| 0.35
+Today is the day. At noon Washington time the U S D A publishes Crop Production and WASDE. ||| 0.4
+Yesterday I said the trade was looking for corn yield near one hundred eighty-two point four bushels an acre, against a current estimate of one hundred eighty-three. ||| 0.4
+Here is what actually matters about that number, and it is not the yield itself. ||| 0.45
+Yield times harvested acres gives you production. Production plus carry-in gives you total supply. Subtract feed, exports, ethanol and food use, and what is left is ending stocks. ||| 0.45
+Divide ending stocks by total use and you get stocks-to-use — the market's tension gauge. ||| 0.5
+Half a bushel of yield is roughly forty-five million bushels of supply. On a two point one billion bushel crop that is small. On the stocks number, it is not. ||| 0.45
+That is why the desk cares about a decimal place. The yield moves the stocks number by a multiple. ||| 0.6
+Now, the merchant. ||| 0.4
+Ask most people what a commodity trader does and they will say: buys wheat, waits for it to go up, sells it. ||| 0.45
+That is almost exactly wrong. ||| 0.5
+A merchant is paid for transformation. Three kinds. ||| 0.4
+Space. Time. Form. ||| 0.7
+Space is geography. Buy soybeans in Mato Grosso where they are abundant, deliver them to a crusher in Shandong where they are needed. ||| 0.4
+Time is storage. Buy wheat at harvest when every farmer is selling at once, hold it, sell it in spring. ||| 0.4
+Form is processing. Crush soybeans into meal and oil. Mill wheat. Refine sugar. ||| 0.5
+Each transformation has a cost — freight, storage, financing, processing. The merchant's job is to lock a selling price that exceeds the buying price plus all of it. ||| 0.45
+The margin is thin. A few dollars a tonne. The volumes are enormous. That is the business model. ||| 0.6
+Which brings us to the distinction that organises everything: physical versus paper. ||| 0.45
+Physical means real cargoes. Actual beans, on an actual vessel, against a contract with a real counterparty, a quality spec and a load window. ||| 0.4
+Paper means futures and options on an exchange. ||| 0.4
+And here is the key. A physical desk uses paper constantly, but almost never to speculate. ||| 0.5
+Buy sixty thousand tonnes of beans, and you are instantly long sixty thousand tonnes of price risk. Within minutes, the desk sells the equivalent in futures. ||| 0.45
+Now if the market collapses tomorrow, the loss on the cargo is offset by the gain on the short futures. ||| 0.4
+The flat price exposure is gone. Deliberately. ||| 0.5
+What is left is the difference between the price of your specific beans and the futures price. ||| 0.4
+And you already know what that is called. ||| 0.35
+That is the basis. The differential you heard being argued over yesterday. ||| 0.6
+Let's put numbers on it, because this is where it becomes real. ||| 0.4
+Brazilian beans, F O B Santos, at futures minus twenty cents a bushel. A Chinese crusher pays futures plus eighty, delivered. ||| 0.45
+Gross spread, one dollar a bushel. Freight, sixty cents. Financing, insurance and port costs, ten. ||| 0.4
+Thirty cents of margin. About eleven dollars a tonne. On a sixty thousand tonne Panamax, six hundred sixty thousand dollars. ||| 0.55
+Now watch what happens when the market moves. ||| 0.4
+Chicago beans rally a dollar a bushel overnight. The cargo you own is worth a dollar more. Your short futures lost a dollar. Net effect on your profit: zero. ||| 0.5
+But suppose instead the Santos differential moves. You bought at minus twenty; the market for that same cargo is now minus ten. ||| 0.45
+Ten cents a bushel, on two point two million bushels, is two hundred twenty thousand dollars. ||| 0.4
+The board did not move at all. ||| 0.4
+A dollar of flat price was worth nothing to you. Ten cents of basis was worth a third of the trade. ||| 0.6
+Listen to how that gets negotiated. ||| 0.35
+TRADER: Where are you on Santos November? ||| 0.25
+BROKER: Sellers are plus five, buyers are around minus two. ||| 0.25
+TRADER: I paid minus twenty three weeks ago. ||| 0.25
+BROKER: Different market. Line-up's full and the river's low. Nobody's offering cheap. ||| 0.6
+Nothing in that exchange was about soybean prices. ||| 0.4
+It was about vessel queues and river levels. Basis is the price of logistics, quality and urgency — and those are physical facts, not market opinions. ||| 0.55
+Which is also why a merchant does not get rich from a bull market. ||| 0.45
+If wheat rallies fifty percent, the merchant is hedged. The gain sits with whoever owned the flat price — the farmer, the fund, the speculator. ||| 0.45
+The merchant earns the same few dollars a tonne, on more expensive inventory that costs more to finance. ||| 0.5
+This is the part people find counter-intuitive. Higher prices are not obviously good for a trading house. Volatility and dislocation are. ||| 0.6
+Now, the assets. ||| 0.35
+Some merchants own the chain: elevators, ports, crush plants, terminals. Others rent everything. ||| 0.4
+Look at it through the three transformations and it becomes obvious. Own storage and you can play time. Own a terminal in a congested port and you own space. Own a crush plant and you own form. ||| 0.5
+The cost is capital, and in bad years those assets sit half empty. The large houses run a hybrid — strategic assets where control matters, rented capacity everywhere else. ||| 0.55
+And the landscape: A B C D — Archer Daniels Midland, Bunge, Cargill, Louis Dreyfus. Around them COFCO, Olam, Viterra, and Glencore's agricultural arm. ||| 0.4
+Louis Dreyfus has been at it since eighteen fifty-one, which tells you something about how durable this model is when it is run properly. ||| 0.6
+One last thing, and it is the honest part. ||| 0.4
+That six hundred sixty thousand dollars is not risk-free. Three things can still take it from you. ||| 0.45
+One: freight. You priced the arb at sixty cents. If you have not fixed the vessel and the market rallies twenty dollars a tonne, that margin is gone. ||| 0.45
+Two: the basis at origin. You still have to buy the beans. If Santos rallies from minus twenty to plus five while you are accumulating, you are buying at a loss against a sale you already made. ||| 0.45
+Three: execution. Demurrage on a delayed vessel, a quality claim at discharge, a counterparty who does not perform. ||| 0.5
+The hedge removed the risk you could not control. Everything left is the risk you are paid to manage. ||| 0.6
+Takeaway. ||| 0.35
+Merchants are paid for transformation across space, time and form — not for prediction. ||| 0.4
+Flat price is hedged away on purpose, so the desk can concentrate on basis, freight and execution. ||| 0.4
+And basis is not a financial abstraction. It is vessel queues, river levels, protein content and who needs cargo this week. ||| 0.55
+Tomorrow: the futures side properly — how a hedge is actually placed, what a margin call does to a solvent trade, and what the shape of the forward curve is telling you. ||| 0.4
+Quiz is in your notes. See you then. ||| 0.3

package/feed.xml

@@ -18,21 +18,21 @@
       <title>Commodity Desk Daily</title>
       <link>https://www.npmjs.com/package/@sdelsad/commodity-desk-daily</link>
     </image>
+    <item>
+      <title>Ep 2 — What a Merchant Does, and Why Basis Is the Whole Game</title>
+      <description>Merchants are paid for transformation — space, time, form — not for prediction. One Santos-to-Shandong Panamax carried all the way through: why a one-dollar board move nets to zero while a ten-cent basis move is a third of the trade, and the three risks that survive a perfect hedge.</description>
+      <enclosure url="https://storage.googleapis.com/podcast-audio-2647223968/commodity-desk-daily/ep02.mp3?v=2" length="5135948" type="audio/mpeg"/>
+      <guid>https://storage.googleapis.com/podcast-audio-2647223968/commodity-desk-daily/ep02.mp3?v=2</guid>
+      <pubDate>Tue, 11 Aug 2026 05:00:00 GMT</pubDate>
+      <itunes:duration>427</itunes:duration>
+    </item>
     <item>
       <title>Ep 1 — The Units and the Language of the Desk</title>
-      <description>Bushels, lots, ticks and hundredweights — the units a trading floor actually uses, and why they are what they are. Then the grammar of a quote: why physical cargoes trade as a differential to a futures month, and what bid, offer, hit, lift, done and workable really mean.</description>
+      <description>Bushels, lots, ticks and hundredweights — the units a trading floor actually uses, and why they are what they are. Then the grammar of a quote: why physical cargoes trade as a differential to a futures month, and what bid, offer, hit, lift, done and workable really mean. Three desk dialogues.</description>
       <enclosure url="https://storage.googleapis.com/podcast-audio-2647223968/commodity-desk-daily/ep01.mp3" length="4739372" type="audio/mpeg"/>
       <guid>https://storage.googleapis.com/podcast-audio-2647223968/commodity-desk-daily/ep01.mp3</guid>
-      <pubDate>Tue, 11 Aug 2026 05:00:00 GMT</pubDate>
+      <pubDate>Mon, 10 Aug 2026 05:00:00 GMT</pubDate>
       <itunes:duration>394</itunes:duration>
     </item>
-    <item>
-      <title>Ep 2 — Flat Price vs Basis</title>
-      <description>Why a physical desk kills the flat price within minutes, and what remains: the basis. A Santos cargo where a one-dollar board move nets to zero and a quiet ten-cent differential move is the entire profit.</description>
-      <enclosure url="https://storage.googleapis.com/podcast-audio-2647223968/commodity-desk-daily/ep02.mp3" length="6639596" type="audio/mpeg"/>
-      <guid>https://storage.googleapis.com/podcast-audio-2647223968/commodity-desk-daily/ep02.mp3</guid>
-      <pubDate>Tue, 11 Aug 2026 05:00:00 GMT</pubDate>
-      <itunes:duration>553</itunes:duration>
-    </item>
   </channel>
 </rss>

package/glossary.md

@@ -2,36 +2,49 @@
 
 Units, conventions and desk expressions, accumulated as the show introduces them.
 
+- **ABCD** — the four historic majors, Archer Daniels Midland, Bunge, Cargill and Louis Dreyfus  _(ep 2)_
+- **arb** — the full economics of moving a cargo, buy price plus freight and costs against the sale  _(ep 2)_
+- **asset-heavy** — owning the physical chain, which converts a volatile trading margin into a steadier toll  _(ep 2)_
+- **asset-light** — renting elevators, terminals and plants rather than owning them  _(ep 2)_
 - **at** — the small word that introduces the offer side (462 bid, at 462 and a half)  _(ep 1)_
 - **bag (coffee)** — 60 kg, how the coffee trade counts volume  _(ep 1)_
 - **bid** — the price a buyer will pay  _(ep 1)_
 - **bushel** — volume measure standardized into weight, 60 lb for soybeans and wheat, 56 lb for corn  _(ep 1)_
 - **bushels per tonne** — about 36.7 for soybeans and wheat, 39.4 for corn  _(ep 1)_
+- **carry-in** — stocks left over from the previous season, the starting point of a balance sheet  _(ep 2)_
 - **cents per bushel** — Chicago grain quoting unit, 4.39 dollars per bushel is spoken four thirty-nine  _(ep 1)_
 - **conversion factors** — 36.7 bushels per tonne for wheat and beans and 39.4 for corn, so cents per bushel times 0.367 or 0.394 gives dollars per tonne  _(ep 1)_
 - **cwt** — hundredweight, 100 lb, the quoting unit for US rice and cattle  _(ep 1)_
 - **cwt (hundredweight)** — 100 lb, the quoting unit for US rice  _(ep 1)_
 - **deferred** — months or shipment windows further out  _(ep 1)_
+- **demurrage** — the penalty owed when a vessel is held beyond the agreed laytime  _(ep 2)_
 - **differential** — the premium or discount to a named futures month, as in November plus 80, the negotiated part of a physical quote  _(ep 1)_
 - **differential (basis)** — the premium or discount to a named futures month, quoted as plus 80 or minus 20  _(ep 1)_
 - **done** — the word that seals a trade  _(ep 1)_
 - **firm** — a tradable quote that binds if accepted, often with a time limit  _(ep 1)_
 - **five percent more or less** — the contractual tolerance on cargo size, exercised at the seller's option  _(ep 1)_
 - **flat price** — the full outright price level  _(ep 1)_
+- **flat price exposure** — outright price risk, removed deliberately by hedging so only the basis remains  _(ep 2)_
+- **FOB** — free on board, the cargo is priced at the load port with the buyer taking it from the ship's rail  _(ep 2)_
 - **hit** — your bid was taken by a seller  _(ep 1)_
 - **hit the bid** — to sell into someone else's bid  _(ep 1)_
 - **indication** — a guide price that is not firm  _(ep 1)_
 - **laycan** — the window during which a vessel may present for loading  _(ep 1)_
 - **lift the offer** — to buy from someone else's offer  _(ep 1)_
 - **lifted** — your offer was taken by a buyer  _(ep 1)_
+- **line-up** — the queue of vessels waiting to load at a port, a key driver of origin basis  _(ep 2)_
 - **lot** — one futures contract, 5,000 bushels for Chicago grains, the unit desks count positions in  _(ep 1)_
 - **metric tonne** — 2,204.6 lb, the grain trading weight unit outside the US  _(ep 1)_
 - **month codes** — F G H J K M N Q U V X Z for January through December, the Z is December  _(ep 1)_
 - **offer** — the price a seller will accept  _(ep 1)_
+- **paper** — exchange futures and options, used by a physical desk to hedge rather than to speculate  _(ep 2)_
+- **physical (cash)** — real cargoes under contract with specs and load windows, as opposed to paper  _(ep 2)_
 - **point** — one hundredth of a cent per pound, how softs desks count moves  _(ep 1)_
 - **point (softs)** — one hundredth of a cent per pound, so up 300 points means up 3 cents  _(ep 1)_
 - **prompt** — the nearby month or shipment window, ready to move now  _(ep 1)_
 - **short ton** — 2,000 lb, used by US soybean meal, about 10 percent lighter than a metric tonne  _(ep 1)_
+- **space time form** — the three transformations a merchant is paid for, geography, storage and processing  _(ep 2)_
+- **stocks-to-use** — ending stocks divided by total use, the market's tension gauge  _(ep 2)_
 - **tick** — smallest price increment, a quarter cent per bushel in Chicago grains, worth 12.50 dollars per lot  _(ep 1)_
 - **WASDE** — the USDA monthly World Agricultural Supply and Demand Estimates report  _(ep 1)_
 - **washed out** — offsetting trades cancel each other and only the price difference is settled  _(ep 1)_

package/package.json

@@ -1,7 +1,7 @@
 {
   "name": "@sdelsad/commodity-desk-daily",
-  "version": "1.0.10",
-  "description": "Commodity Desk Daily - Ep 1: The Units and the Language of the Desk",
+  "version": "1.0.12",
+  "description": "Commodity Desk Daily - Ep 2: What a Merchant Does, and Why Basis Is the Whole Game",
   "license": "CC-BY-4.0",
   "keywords": [
     "podcast",

package/ep01.md

@@ -1,144 +0,0 @@
-# Commodity Desk Daily — Ep 1
-## The Units and the Language of the Desk
-
-*A daily 10-minute briefing on physical commodity trading.*
-
----
-
-### Key takeaways
-
-- A **bushel is a volume, not a weight** — so its weight is fixed by law and differs by crop: 60 lb for soybeans and wheat, 56 lb for corn, 32 lb for oats. Tonne conversions therefore differ by crop too (~36.74 bu/t soybeans, ~39.37 bu/t corn).
-- Chicago quotes **cents per bushel**; one lot is **5,000 bushels**; the tick is **¼ cent = $12.50**, so one cent = $50 per lot.
-- "I'm long fifty December corn" = 50 lots = 250,000 bu ≈ 6,350 t, and each 1¢ move = $2,500.
-- Units are not universal: Matif wheat is **€/tonne, 50 t lots**; cotton is cents/lb; rice is $/cwt; soybean meal trades in **short tons** (2,000 lb ≈ 907 kg), not metric tonnes — a 10% error if confused.
-- Physical cargoes are quoted as a **differential to a named futures month** ("plus eighty-five"), not as a flat price. The screen sets the flat price; the negotiation is about the differential.
-- Every quote names a **month**, because prompt and deferred shipment are different products with different prices.
-- The verbs are precise: **bid / offer / hit / lift / done / workable / indication / washout.**
-- Quantity language carries contractual meaning: "5% more or less at seller's option" and the **laycan** window are obligations, not approximations.
-
-### Vocabulary of the day
-
-| Term | Meaning |
-|---|---|
-| Bushel (bu) | Volume measure (~35 L); legal weight per crop: 60 lb wheat/soybeans, 56 lb corn |
-| Cents per bushel | Chicago quoting convention; "465" = $4.65/bu |
-| Tick | Smallest price increment: ¼ cent = $12.50 per lot |
-| Lot / contract | 5,000 bu on CBOT grains; 50 t on Matif wheat |
-| cwt | Hundredweight = 100 lb; used for rice and cotton |
-| Short ton | 2,000 lb ≈ 907 kg (vs metric tonne = 1,000 kg); soybean meal trades in short tons |
-| Differential / basis | Price expressed against a futures month: "plus 85" = 85¢/bu over |
-| Prompt vs deferred | Loading now vs loading in a later window |
-| Month codes | H Mar, K May, N Jul, U Sep, Z Dec |
-| Bid / Offer | Where someone will buy / sell |
-| Hit / Lift | Sell into the bid / buy from the offer |
-| Done | The trade happened at that level |
-| Workable | The price is negotiable |
-| Indication | A guide price, not firm |
-| Washout | Cancelling a contract by settling the cash difference |
-| Laycan | Window in which the vessel may present for loading |
-| 5% more or less | Contractual tolerance on cargo size, at seller's option |
-
-### Market pulse
-
-December corn ~$4.65/bu, November soybeans ~$11.82/bu, September Chicago wheat ~$6.51/bu. Wheat led higher on Black Sea supply disruption; corn and beans stayed heavy as 1–3 inches of rain crossed Illinois, Indiana and Ohio. **Wednesday brings USDA Crop Production and WASDE**: the trade expects corn yield near 182.4 bu/acre (slightly below the current estimate) and soybeans near 52.9.
-
----
-
-## Quiz — Day 1
-
-**J-0 — Episode 1: The units and the language of the desk**
-
-**Q1.** A trader tells you: *"I'm short thirty December corn and long two Panamaxes of Brazilian beans, sixty thousand tonnes each."* Roughly how many bushels is each side, and why can you not net the two positions against each other?
-
-**Q2.** You are offered soybean meal at "$318" and told the seller is American. A colleague converts it to €/tonne by dividing by the EUR/USD rate and hands you the number. What has he almost certainly got wrong, and by roughly what percentage?
-
-**Q3.** Two quotes for the same origin land on your desk within an hour: *"plus 78, prompt"* and *"plus 85, November"*. A junior concludes the market rallied 7 cents in an hour. Why is that conclusion wrong, and what would actually have to be true for the two numbers to be comparable?
-
-*Answer in the conversation to get detailed feedback.*
-
----
-
-<br><br>
-
-## ▼ SOLUTIONS BELOW — scroll only after answering ▼
-
-<br><br>
-
-**A1.** Thirty lots of corn = 30 × 5,000 = **150,000 bushels** (~3,810 t at 39.37 bu/t). The beans are 120,000 t ≈ **4.41 million bushels** (120,000 × 36.74). Two reasons they don't net: they are **different commodities** — corn and soybeans have their own supply-and-demand and their own futures contract — and the sizes are wildly different, roughly 1 to 29 in bushel terms. The trap is treating "bushels" as a common denominator: bushels of corn and bushels of soybeans are not fungible, and even the bushel-to-tonne factor differs between them.
-
-**A2.** Chicago soybean meal is quoted in **US dollars per short ton**, not per metric tonne. A short ton is 2,000 lb ≈ 907.2 kg, so a metric tonne is about **10.2% more** meal. Converting currency without converting weight understates the €/tonne price by roughly a tenth — $318/short ton is about $350.5/metric tonne before any FX. On a 30,000 t cargo, that mistake is close to a million dollars.
-
-**A3.** Nothing about the flat price is being quoted at all — both numbers are **differentials to futures**, and to different things. "Plus 78 prompt" is a cargo loading now; "plus 85 November" is a cargo loading in November, priced against the November board. They are different delivery periods and typically different futures months, so the 7-cent gap measures the market's view on **time and logistics**, not a rally. To compare them you would need the same shipment period and the same futures month — and then the difference would tell you something real about how tight prompt supply is versus November. This is the single most common beginner error: reading a differential as if it were a price.
-
----
-
-## The episode, in writing
-
-### Market pulse
-
-December corn is trading around $4.65/bu, November soybeans near $11.82, September Chicago wheat around $6.51. Wheat is the day's mover, up double digits on Black Sea supply disruption. Corn and beans are heavy: 1–3 inches of rain is falling across Illinois, Indiana and Ohio, and August rain makes soybeans.
-
-Tomorrow (Wednesday) the USDA publishes Crop Production and WASDE. The trade expects corn yield around **182.4 bu/acre**, slightly below the current estimate, and soybeans near **52.9**. Those two numbers are worth remembering — they will frame the entire week.
-
-### The bushel, and why it is strange
-
-A bushel is not a weight. It is a volume — roughly 35 litres, historically a basket. Which creates an obvious problem: a basket of corn and a basket of soybeans do not weigh the same. So the trade fixed the weights by law. A bushel of soybeans or wheat is 60 pounds; a bushel of corn is 56; oats, 32.
-
-That is why the conversion to tonnes differs by crop: one tonne of soybeans is about 36.74 bushels, one tonne of corn about 39.37.
-
-Why does such a unit survive? It comes from the English grain trade, where grain was measured by volume before anyone weighed it, and Chicago inherited the convention in 1848 and never let it go. The rest of the world quotes dollars per tonne — so a grain trader converts between the two all day, in their head.
-
-### How prices are quoted
-
-Chicago quotes **cents per bushel**. "Corn is four sixty-five" means 465 cents — $4.65 — per bushel. The smallest increment is a quarter of a cent: a **tick**.
-
-One contract, one **lot**, is 5,000 bushels. So a one-cent move is $50 per lot, and a quarter-cent tick is $12.50.
-
-That lets you decode a sentence like *"I'm long fifty December corn"*: 50 contracts, 250,000 bushels, about 6,350 tonnes — and every cent the market moves is $2,500.
-
-Units are not universal. European wheat on Matif trades in euros per tonne, 50 tonnes to a lot. Cotton and rice quote cents per pound and dollars per hundredweight (cwt = 100 lb). And beware "tons": a metric tonne is 1,000 kg, an American short ton is 2,000 lb ≈ 907 kg. Chicago soybean meal trades in short tons. Confusing the two is a 10% error.
-
-### The part that matters most: nobody says the price
-
-> **BUYER:** November Santos, what have you got?
-> **SELLER:** I make you plus eighty-five.
-> **BUYER:** That's rich. Last one I saw trade was plus seventy-eight.
-> **SELLER:** On prompt, yes. You're asking me for November.
-
-No dollar figure was spoken. "Plus eighty-five" means 85 cents per bushel **above the November futures contract** in Chicago. That is a differential — a basis. The flat price comes from the screen; the differential is what these two are actually negotiating.
-
-And note the second half: *plus 78* was for prompt shipment, loading now; *plus 85* is for November. Different month, different cargo, different price.
-
-Which is why every quote names a month. Futures months carry letters — H March, K May, N July, U September, Z December — so a screen shows ZCZ6 for December 2026 corn. Out loud, nobody says that: they say "December corn", or just "the Z".
-
-### The verbs
-
-A **bid** is where someone will buy; an **offer** is where they will sell. **Hit** the bid and you sold to them; **lift** the offer and you bought from them. **"Trades at, done"** means it happened at that level. **Workable** means negotiable; **indication** means a guide, not a firm price. A **washout** is two parties who no longer want the cargo settling the cash difference instead of shipping anything.
-
-> **BROKER:** I've got fifty December offered at four sixty-six and a quarter.
-> **TRADER:** I'm bid four sixty-five and a half for fifty.
-> **BROKER:** He won't come down. Four sixty-six is workable.
-> **TRADER:** Take it. Fifty at four sixty-six.
-
-Three quarters of a cent apart. On fifty lots, that gap was $1,875 — small numbers, large multipliers. That is the scale at which a desk argues.
-
-### How quantity is spoken
-
-> **TRADER:** What's the parcel?
-> **EXECUTION:** Sixty thousand tonnes, five percent more or less at seller's option.
-> **TRADER:** Laycan?
-> **EXECUTION:** Fifteenth to the twenty-fifth of November.
-
-"Five percent more or less" means the cargo may vary by 5% either way — a ship is never loaded to the exact tonne, and the tolerance is contractual. **Laycan** is the window during which the vessel may present for loading; miss it and you are in breach.
-
-### Takeaway
-
-Units first: bushels are volume, weights differ by crop, so tonne conversions differ too. Cents per bushel, 5,000 bushels a lot, quarter-cent ticks.
-
-Quotes second: physical trades as a differential against a named futures month, not as a flat price.
-
-And the verbs are exact — bid, offer, hit, lift, done, workable.
-
-Some of this will still feel foreign for a week. That is the point: this is the language as it is actually spoken, not a simplified version of it.
-
-**Tomorrow:** what a commodity merchant actually does — and why, once the flat price is hedged away, that differential is the entire business.

package/ep01.script.txt

@@ -1,69 +0,0 @@
-Welcome to Commodity Desk Daily, episode one. ||| 0.35
-Before we trade anything, we need to speak the language. ||| 0.5
-Today: the units, the way prices are quoted, and the words people actually use on a trading floor. ||| 0.7
-First, the market pulse. ||| 0.4
-Chicago corn for December sits around four dollars sixty-five a bushel. November soybeans near eleven eighty-two. September Chicago wheat around six fifty-one. ||| 0.45
-Wheat is the mover, up double digits, on Black Sea supply disruption. Corn and beans are heavy, because one to three inches of rain is falling across Illinois, Indiana and Ohio, and rain in August makes soybeans. ||| 0.5
-And tomorrow, Wednesday, the U S D A publishes its Crop Production and supply and demand reports. ||| 0.35
-The trade is looking for corn yield around one hundred eighty-two point four bushels an acre, slightly below the current estimate, and soybeans near fifty-two point nine. ||| 0.4
-Keep those two numbers in your head. We will come back to them all week. ||| 0.7
-Now. If you have been listening to that pulse thinking, a bushel of what, exactly — this episode is for you. ||| 0.5
-Let's start with the bushel, because it is the strangest unit you will meet. ||| 0.45
-A bushel is not a weight. It is a volume. About thirty-five litres, historically a basket. ||| 0.4
-Which creates an obvious problem. A basket of corn and a basket of soybeans do not weigh the same. ||| 0.5
-So the trade fixed the weights by law. A bushel of soybeans or wheat is sixty pounds. A bushel of corn is fifty-six pounds. Oats, thirty-two. ||| 0.45
-That is why the conversion to tonnes is different for every crop. ||| 0.35
-One tonne of soybeans is about thirty-six point seven bushels. One tonne of corn, about thirty-nine point four. ||| 0.5
-Why does it survive? Because it comes from the English grain trade, where grain was measured by volume before anyone weighed it, and Chicago inherited the convention in eighteen forty-eight and never let go. ||| 0.4
-The rest of the world quotes dollars per tonne. So a grain trader converts between the two all day long, in their head. ||| 0.7
-Prices, then. Chicago quotes cents per bushel. ||| 0.35
-When someone says corn is four sixty-five, they mean four hundred sixty-five cents, four dollars sixty-five, per bushel. ||| 0.4
-The smallest move is a quarter of a cent. That is a tick. ||| 0.35
-One contract, one lot, is five thousand bushels. So a one cent move is fifty dollars a lot. A quarter-cent tick is twelve dollars fifty. ||| 0.5
-Now you can decode a sentence like: I am long fifty December corn. ||| 0.4
-That is fifty contracts. Two hundred fifty thousand bushels. About six thousand three hundred tonnes. And every cent the market moves is two and a half thousand dollars. ||| 0.6
-Elsewhere the units change. European wheat on Matif trades in euros per tonne, fifty tonnes a lot. ||| 0.35
-Cotton and rice quote cents per pound and dollars per hundredweight — a hundredweight being a hundred pounds, written c w t. ||| 0.4
-And be careful with tons. A metric tonne is a thousand kilos. An American short ton is two thousand pounds, about nine hundred seven kilos. Soybean meal in Chicago trades in short tons. Confusing the two is a ten percent error. ||| 0.7
-Here is the part that matters most. ||| 0.4
-On a physical desk, people very rarely say the price. ||| 0.5
-Listen to this. ||| 0.35
-BUYER: November Santos, what have you got? ||| 0.25
-SELLER: I make you plus eighty-five. ||| 0.25
-BUYER: That's rich. Last one I saw trade was plus seventy-eight. ||| 0.25
-SELLER: On prompt, yes. You're asking me for November. ||| 0.6
-Nobody said a number of dollars. ||| 0.35
-Plus eighty-five means eighty-five cents per bushel above the November futures contract in Chicago. ||| 0.4
-That is a differential — a basis. The flat price comes from the screen. The differential is what the two of them are actually negotiating. ||| 0.5
-And notice the second half of that exchange. Plus seventy-eight was for prompt shipment, loading now. Plus eighty-five is for November. Different month, different cargo, different price. ||| 0.5
-Which is why every quote names a month. ||| 0.35
-Futures months have letters — H is March, K is May, N is July, U is September, Z is December. You will see ZCZ6 on a screen and it means corn, December, twenty twenty-six. ||| 0.45
-Out loud, nobody says that. They say December corn, or just the Z. ||| 0.7
-Then there are the verbs, and they are precise. ||| 0.4
-A bid is where someone will buy. An offer is where they will sell. ||| 0.35
-If you hit the bid, you sold to them. If you lift the offer, you bought from them. ||| 0.4
-Trades at, done — the trade happened at that level. ||| 0.35
-Workable means the price is negotiable. Indication means it is not a firm price, only a guide. ||| 0.4
-And a washout is when two parties who no longer want the cargo settle the difference in cash instead of shipping anything. ||| 0.6
-One more exchange, so you hear a broker at work. ||| 0.35
-BROKER: I've got fifty December offered at four sixty-six and a quarter. ||| 0.25
-TRADER: I'm bid four sixty-five and a half for fifty. ||| 0.25
-BROKER: He won't come down. Four sixty-six is workable. ||| 0.25
-TRADER: Take it. Fifty at four sixty-six. ||| 0.55
-Three quarters of a cent apart. On fifty lots, that gap was one thousand eight hundred seventy-five dollars. ||| 0.4
-That is the scale a desk argues at — small numbers, large multipliers. ||| 0.7
-Last one. Notice how quantity is spoken. ||| 0.35
-TRADER: What's the parcel? ||| 0.25
-EXECUTION: Sixty thousand tonnes, five percent more or less at seller's option. ||| 0.25
-TRADER: Laycan? ||| 0.25
-EXECUTION: Fifteenth to the twenty-fifth of November. ||| 0.55
-Five percent more or less means the cargo can vary by five percent either way — a ship is never loaded to the exact tonne. ||| 0.4
-And laycan is the window during which the vessel may present for loading. Miss it and you are in breach. ||| 0.6
-So, the takeaway. ||| 0.4
-Units first: bushels are volume, weights differ by crop, so tonne conversions differ too. Cents per bushel, five thousand bushels a lot, quarter-cent ticks. ||| 0.4
-Quotes second: physical trades as a differential against a named futures month, not as a flat price. ||| 0.4
-And the verbs are exact. Bid, offer, hit, lift, done, workable. ||| 0.5
-Some of this will still feel foreign for a week. That is normal, and it is the point — this is the language as it is actually spoken, not a simplified version of it. ||| 0.4
-Everything introduced today is written out in the glossary in your notes. ||| 0.6
-Tomorrow: what a commodity merchant actually does — and why, once the flat price is hedged away, the differential you just heard being argued over is the entire business. ||| 0.4
-The quiz is in your notes. See you then. ||| 0.3