Harvest Quality issues = increased segregations = increased costs at harvest and ongoing until bins are emptied (ie around 12-18 mths opex impact).
Increased segregations including damaged grain = increased risk of further damage in store = increased care and monitoring costs. Importantly any further downgrades beyond classification at harvest intake = direct cost to GNC (ie GNC guarantees quality level within store if it's downgraded this is something GNC has to cover either by compensation or by buying correct quality grain to compensate).
That said I don't think we're seeing anything massive (yet). But keep an eye on weather. A big but compromised crop does not translate into profits in the same way as a big, clean crop.
Funds selling down might finish soon (may not)
GNC Price at posting:
$3.59 Sentiment: Buy Disclosure: Held
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