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sw363535
Honored Advisor

Re: Business Strategy Thoughts...Iowa State Fails

Appreciate the thoughtful response --------------- a great description of "our" realities.

 

$4.40 & $4.80 may not be the information that trigers the sale, but It is a vital part  of  the pool of information I need  to find a comfort level with the decisions we make.  Purchases of land, inputs or rents are probably even more in need of a good general pool of data.

Marketing ---------It is  One of the crutches I use to take my focus off of the beating producers take by projections of the potential of the future crops.  Otherwise I focus too much on what is not available to me.

Our costs with irrigation, are higher but we enjoy a higher basis than most of corn producers, and have storage to feed that a good market later.  A head full of cost data helps get me past the sirens of the industry who are trying to gain control of the crop before it is planted.

Historically, for most,---- in a surplus production climate ----- Early marketing offers should be given strong consideration.  Since 2009 the supply of production has not been large enough(compared to demand) to maintain the historic market pricing pattern.  The premium paid for late delivery has been more than double what storage and frieght allow.

"supply side economics" will return but the fuel market is probably going to keep that from happening as fast as we expect.

 

Thanks time

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timetippingpt
Honored Advisor

Re: Business Strategy Thoughts...Iowa State Fails

Excellent thoughts sw. You irrigators work harder but have bushels so you could indeed do some cost based decision making that most cannot. Kind of a ROI in all those pumps and pipes.

 

Did you read Gulke this weekend?

"Do we really think that $13 beans will go to $16? I told my guys that I don’t want any beans on my farm at $14," he says. "My bean bins will be empty at $14."

 

Wow, awful confident for the little kernel. An interesting point on his driving quote is that he is smart enough to know the price to dump everything? None of us are that smart, ever. I thought his real strength was that he was a MACD driven decision maker and thus his system would allow the upside to run until it was over. He must haven gotten to rich on commissions to maintain what was a pretty good approach.

 

For my money, pretty good odds we get back to $16.30 (we were there just 10 weeks ago), so it isn't impossible. If NASS gets it right in October, pretty good shot at testing the highs. It will all be over before the end of March, we'll take what the market gives us, wether it is $13, $14, or even $18. You can see why my mind focuses on time. I admit I do NOT KNOW how far the price can go.

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sw363535
Honored Advisor

Re: Business Strategy Thoughts...Iowa State Fails

Time,

 

I can think of a better argument for Gulke's advice.  And In our production location we may actually do something similar, but for very different reasons that relate more to the profit margin available in beans and the carry for corn in a great basis for corn area.  But that is an individual location issue.

 

Basing his position on eminant surplus equates to saying "I don't have a good reason"----- but please keep your eye on the imaginary surplus while I hope you ignore the usda reports that do not support the big surplus promotion.

 

final export #s will take us back into the 600 m range for carry in on corn and  75 M for beans   

Point is we are hoping for a 169M carry out equaling 5% of supply for soybeans, and in corn we are hoping for a 1800M carry equating to a 12.4% share of overall supply-------- keep in mind this years 700M carry out has us shipping corn north up the mississippi and supported $7 corn with pretty strong usage most of the year.

We have nearly the same overall harvested acres we had in May --------- those numbers should be reduced on both crops at some point----- the heat is surely doing it's part.

 

Sorry I just have a hard time keeping my eye on the "cloud" of supply that hangs over both markets according to Mr. Gulke.

 

 

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timetippingpt
Honored Advisor

Re: Business Strategy Thoughts...Iowa State Fails

Well thought sw.

 

And of course, the available supply will exceed demand for the next 8 weeks regardless of yields. So, it is indeed possible that corn trades sideways to lower while beans tread water. Why pay up for something that is available. This is where I think the user of grains will be amazed at how fast harvest completes. It is going to be a dry crop for most of the belt and farmers will fill bins to brim of $4.40 corn and just risk it till next year. And of course, 5% of the crop will be used straight out of the field.

 

It is very interesting how TIME lines up through the winter for the different grains. Different starting points but similar ending points.

Have a safe harvest sw.

 

Neighbors were posting on facebook pics of their 2 machines shelling corn down on the sand hills around the river LAST NIGHT. No need to wait for monday morning when you fill the trucks on Sunday night. 

 

The best time of year is upon us.

timetippingpt
Honored Advisor

Re: Business Strategy Thoughts...Iowa State Fails

It is interesting that no one wants to defend the Iowa State boys. Maybe every one in Iowa already knew to ignore them?  Smiley Very Happy

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