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10-30-2018 09:28 AM
Projecting acreage today. If bean acres are reduced by 20-25% and that is shifted to corn acres the supply demand charts fall to 2.50-2.80 corn futures.
If bean acres fall 10% and shift to corn we are looking at 2.80-3.00$ corn futures.
So for the farmers who frequent this forum, what are the plans for next year? Roll the dice and plant some beans? Switch to cotton/milo/niche crop? Or plant corn?
10-30-2018 09:57 AM
If it goes to $4.50, we will wind up in at least the $5 handle. The last two major highs are at $4.12 and $4.39, so if we trade up through both, the market gets very bullish and we see $5.00 and above sometime fairly soon thereafter.
A lot of it all depends on how deep this stock market correction goes. Is it a correction or the start of a secular bear market ? How much damage will it do to the overall economy, at what point is a negative wealth effect triggered ? Right now no one knows the answers to these questions, and so any projections about where any asset prices will be to the upside going forward probably are not worth much.
10-30-2018 10:03 AM
Also with record soybean acres this year, that tells me that it's the natural rotation to move to corn anyway for a lot of these farmers. We are projecting a 10-20% shift from soybean to corn acreage, and its a scary looking projection. Huge carryover in beans, huge carryover in corn combined with massive corn acres in a rising interest rate climate is a recipe for disaster for many farmers.
10-30-2018 10:24 AM
Switch to marijuana, and sell it where its legal. A guy I know qualified for medical marijuana, and he thought that since its sanctioned by the government, the cost would be far less than what it sells for in the non-medical market. He sure was mistaken and his blood pressure rose off the charts when he found out the price of even the State-sanctioned weed. And as opposed to his pharmacy meds, insurance programs don't pay for medical weed.
I think the problem is that you need a certain type of climate to grow marijuana, and perhaps a certain soil chemistry although I am not sure about the chemistry since its a weed and weeds seem to grow in all soils. I remember reading that the Gallos had reserved some portion of their wine vineyards in California in case marijuana ever was legalized. I don't know if you could do the same in Iowa. But if you can, heck, why not ? It seems to be the ultimate cash crop.
10-30-2018 11:23 AM
For anything legally available it's grown under strict conditions, and whether it's outdoor or indoor there are numerous inputs that are added to maximize the potential of the plant. I'm sure you might be able to grow hemp for fiber out in Iowa. But the high quality stuff people pay big $$$ for takes a lot of capital and political know-how to get started.
10-30-2018 12:09 PM
Ahhh, that's the story. I know this guy whose in his 60's, an old hippie from the 1960's, who never outgrew the desire to get high with weed. Very successful company, has money coming out his ears. Yet every weekend the guy is toasted. So he goes to Amsterdam twice a year to buy seeds, brings them back and grows plants with them. Not a big operation by any means, grows them, in his backyard. Knows how to process them, and winds up with enough that he hasn't had to buy anything in years.
The hobbies people get into. My son and a friend are doing craft beer in his basement now. You can ride up to the supermarket and buy one of fifty brands of beer, but I guess that's not enough because they want to brew their own. I tried one of their first batches, I asked them if they had thrown their socks into the mix.
Speaking of beer and crops to grow, is there any money in growing hops or barley ? You would think that with all the beer consumed around the world, those crop[s would do pretty well, and there's probably a need for a lot of them - although I don't know how much of each goes into a bottle or can of beer. Do they grow those crops in the MidWest ?