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jennys_mn
Veteran Advisor

Bin - Lock (weld) - Go On Vacation

Well, here we are, coming up on $5.00 corn, and there were those last fall saying the sky was falling, and we'd NEVER see $5.00 again.  And guess what?  We STILL have a heck of a lot of weather to go through.  Here in MN, it doesn't look like we're going to make much of a dent in the showbank out my window this month.  And how about the corn still standing out there - anybody able to get it off?

 

Those that control the media outlets had to work overtime last fall to convince farmers that prices would never again rise.  Once again, a propaganda machine driven to get farmers to sell at way to cheap a price.  I said bin, lock go on vacation when corn dropped below $5.00, a level which should've been a good, stable price for all parties.  But the traders want volitility so they can make money, and then have long faces when the volitility goes the wrong way.  Again - I have no sympathy for the traders with the updside down smile.  They're the ones that sold this (corn) market off below where it should've been - again.  Because demand is dead - what a joke.

 

And we still have to battle SB for acres this spring, and we still have to deal with the cold that I see continuing in the Northern Tier states that I spoke about several months ago.  Hope you guys listened to me on this one, and ordered some earlier day corn.

 

Is it time to sell some crop?  Beans, yes.  Corn, Heck NO!  Keep it welded shut for another month, and then we'll take another look at what's going on.  I wish I was still in AZ.  If you farm up here and are still down there - stay there for an extra month.  Nothing to see or do here....

 

 

Jen

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15 Replies
Jim Meade / Iowa City
Senior Advisor

Re: Bin - Lock (weld) - Go On Vacation

What factors convince you to recommendn selling beans and not corn?  How are those factors different for one than the other?

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Hobbyfarmer
Honored Advisor

Re: Bin - Lock (weld) - Go On Vacation

Jenny would there be time before your sell signal to go somewhere warm like far away ?

 

Supposes to be in the 50's and 60's here in South Podunk Country next week.

 

It'll be a welcome change.

 

Have a report from Marion, I'll that they have more snow on the ground than here in southern Ia.

 

Late spring maybe late, late, late

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Hobbyfarmer
Honored Advisor

Re: Bin - Lock (weld) - Go On Vacation

Jim's ? is valid

 

Beans are going to be very tight , corn not so much 

 

From my low perch in the valley between the hills, beans look like the one with more room to the up side. % of current price might be a simular number .  $ per bu beans have the edge, just not the volume.

 

%of farmers holding beans is a very low number I'm willing to bet. Recipe for a break out to the top.

 

Look at all the charts already out the top of the channel

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jennys_mn
Veteran Advisor

Re: Bin - Lock (weld) - Go On Vacation

Jim, in my book it's worth waiting on corn to see if the US plants 10% more beans at the expense of corn.  Also, the northern tier states I see going into more wheat, and maybe some oats this year, also at the expense of corn.  

 

Yes, beans are going to be short.  But I don't see trades going whole hog on buying beans, until they see what exactly is planted, and when and where.  The when is another item - as the spring gets later, it could push more corn acres to beans.  That's where I'm coming from.  These items are going to keep a cap on the beans - for now.  

 

There's a lot of uncertainty right now.  The fact that last year, there was limited corn seed, at least in some varities, and this year there is plenty, speaks volumes.  I suspect there are going to be a lot of farmers out there planting bin run beans.  I would do it.  And if I couldn't get them treated, I wouldn't worry about it.  I still would have saved a pile of money on seed.

 

Jen

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jennys_mn
Veteran Advisor

Re: Bin - Lock (weld) - Go On Vacation

And let's not forget the (rumors) of shipping of the beans up the Mississippi, when it finally quits flooding.   I'm certain that we will be having ship after ship waiting to dump beans in the midwest - like last year 😉

 

Jen

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farmerguy89
Advisor

Re: Bin - Lock (weld) - Go On Vacation

Doesn't he seasonal tendency favor spring sales?

We were way too far into the downside in 13 just like we were too far into he upside in 12. Eventually it corrects: like both years. Funds take a position and add too much momentum.

Im looking to plant more corn If weather and prices hold.

This is a complex emotional game as much as it is a computer game.

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Jim Meade / Iowa City
Senior Advisor

Re: Bin - Lock (weld) - Go On Vacation

Part of the deal is you are playing a hedging game and funds sometimes play a hedging and sometimes a trading game and speculators play a trading game.

 

It's as if some of us were playing full court basketball, others were playing half court, still others were playing horse and we all pretended we were in the same game.  Not at all.

 

The traders and some of the big hedge funds seem to work on technicals and most of us hedgers pretend we're using fundamentals - one must if one thinks one is a seasonal trader.

 

The cutback in ethanol may bet a reprieve.  There may be more cattle on feed.  Exports are up.  The demandn side seems more resilient than we emotionally thought it was a year ago.

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kraft-t
Senior Advisor

Re: Bin - Lock (weld) - Go On Vacation

My mistake! I thought you were one of those that said corn couldn't go below $5 because the crop just wasn't in the field.

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jennys_mn
Veteran Advisor

Re: Bin - Lock (weld) - Go On Vacation

Kraft-t, given what I saw across the northern tier of states, the crop did not look good.  I know that ECIN was bragging up the crop there last year - and it was a good one.  Had we produced a great crop on all the acres that were and were supposed to be corn last year, corn prices would've been in the tank.  No doubt about that.  But the shear number of acres of great farmland that did not get planted, and the lateness of the crop here and in all areas of the country, did not bode well for a super crop.  

 

That aside, I felt that there was enough demand to hold corn near the $5.00 level.  And I felt that binning the crop as it dropped below $5.00 was a far better alternative to selling at harvest, with the depressed prices we saw then.  I saw this scenerio play out some years ago, I can't remember when, but we had this supposed great crop, and come summer, I had multiple mills calling me to see if I had corn left - which I didn't - because I fell for the fall propaganda machine.  I saw last years harvest much the same as I did the one years before.  When the talking heads and the propaganda machine brought out Maryland and the huge corn crop that they were going to harvest there, for me, was the last straw.  Smoke and mirrors, part truths, all in the effort to get farmers to sell at too cheap a price.

 

For me, I felt through my farming career that owning your own bins, and storing it on the farm was my best alternative.  I wasn't bound to a time frame, I didn't get storage fees every month, and I wasn't obligated to sell to who I had it stored with, who charged me big fees if I took it out of their facility to sell elsewhere.  Yes, I forward sold some crop and did upscale selling.  Marketing is the hardest thing I had to do on the farm, especially in Central WI where we were not guaranteed a crop - ever.  Or, when prices were really good, no one locally would give you a contract.

 

The barage of propaganda that's devoted to get a farmer to sell to cheap is unreal.  And it's all OK because it's just under the tab of "doing business".  It should be under the tab of "Intense Greed".  

 

I may have been wrong about the size of last years crop - but I haven't been wrong about the most important consideration for the farmer - what the compensation should be for that crop.  I saw lots of contracts being drafted for cash at the elevator last fall - probably close to 50% sold the crop as it was dropped at the elevator.  How many did it because of the propaganda that demand was dead, and that we would never chew through all that corn produced, especially given Maryland's production?  

 

Given those reasons, and more, is why I posted here bin, lock, and go on vacation.  And it's why this site, and others like it, are so important.

 

Jen

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