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04-01-2013 10:06 AM
Ok, I will start breaking out the beer even though it is still morning if this drop continues. This is a huge "Back to Reality" eyeopener. I think we all better run our Farm Operation's 2013 cash-flow numbers at $5 new crop corn prices. Maybe even $4.75 to be on the safe side, also dail down the families living expenses a little bit too. Anyone else considering opening up a bottle of beer?
04-01-2013 10:25 AM
I would say the market is telling the belt to much corn and even the rest of the grains.Call their bluff with your planting intensions.If you took out a back fourty of hay or pasture in order to plant corn wall to wall.Put it back to forage because a lot of demand is out there.Pricing is a (governing factor) of supply and demand.Thank the lord that they are showing their colors before you guys made the mistake of planting wall to wall.Just be sure to grow enough corm for the whisky distillers! (Yes,open a nother beer and laugh your @$$ off.) Maybe corn back in the 80M acres would be an eye opener!
04-01-2013 10:29 AM
Like I said in the post below this the greatest gift endusers have had in their careers. I guess they're are to busy buying futures and call options to respond. You can buy July 6.50 strike call options for .25 if that isn't a low risk way to locck in your needs for June on what is.
04-01-2013 10:32 AM
Yes, I was kinda kidding about opening a beer this early. I don't think I have drank a beer this early since I was in college going to the University of Iowa 11:00am morning Football games. When you are a young 20 year old kid you can punish your body with early morning beer-drinking. If I started drinking beer this early now, I would probably be sound asleep by 1:30pm in the afternoon. Funny how as we age, we can't do the things we did when we were young, stupid guys in the 18 to 21 year old age group. It was loads of fun however getting up early and drinking beer with the guys and then going to the Iowa Hawkeye 11:00 am Football games 1/2 in the bag. Made the young college Coed girls look alot prettier!!!!!! LOL
04-01-2013 10:37 AM
So, what you think a 2 million acre drop in corn acres, along with a 150 bu/acre yield avg, would do to new crop corn prices?
04-01-2013 11:10 AM
WCMO- every year I build a small EXCEL spreadsheet with a variety of total corn acres, along with all the possible yields that could happen nation-wide. Anywhere from 110bu to 190bu. Helps me keep a handle on possible total corn production for the country. I try and keep it updated as more is known about total planted corn acres and adjust the yields as the USDA adjusts there yield predections. I actually keep 2 yield columns, one for the USDA, and one for my own personal yield prediction. It helps me keep a running total corn production figure. Seems lately the USDA has been over-estimating yields during the growing season the past several years, will be interesting to see what they do in 2013. In North-Central Iowa we are still really bone-dry and need much above just a normal rainfall amount to replenish sub-soil moisture. I think Chicago is under-estimating this vast subsoil dryness across the northern cornbelt. We still could get average rainfall, but still suffer a much lower total yield due to this, I would call this: A Drought Hangover from the 2012 Drought.
04-01-2013 12:25 PM
I told you to take 7.50 a long time ago; thats all the market can reasonably pay for old crop. its too sticky right now.
As for new crop: who cares! You aren't getting 165 bpa on marginal western land/drought land. Things will correct sometime in the future. As for me, I took some risk off at 5.80.... that significantly reduces my coefficient of variation, so there are less negative scenarios for me.. kind of funny how that works.
Cancel the 40,000 kitchen and take the week off.
04-01-2013 02:32 PM - edited 04-01-2013 02:33 PM
Yea, Farmerguy89 I remember you saying $7.50 was a good price. But I actually did ok even after this 90 cent drop. I averaged around $7.75 for most of my 2012 crop corn. All I am currently holding is only "Gambling Stocks", around only 12,000 bushels. So overall, just having these Gambling Stocks of corn of only 12,000 bushels isn't bad at all considering.