Corn Price Update For October 25

[cborman11]

I have done many things thanks.

[rayfcom]

Well then you should be reaping the fruits of your decisions. Congratulations.

Do you rent or own the farm you work ?

[illinifarmer]

Easy fellas, they’re called profit takers for a reason. Ray you said it you can make money up or down in these markets, so why not double the price in all grains? Then we’ll all be happy, simple solution. Honestly it wouldn’t hurt many traders at all especially if on their end they initiated it to happen. Problem number 1: last time that happened every seed, fertilizer, and chemical company doubled their prices. Farmers seen the same gains as these prices. Hold on to your hat if the the landlord catches wind; rent went up triple.

[rayfcom]

Believe me sir, when I am long the market I wish for even half that kind of move. Those are the moves a trader retires on, like when corn shot up a half dozen years ago. Unfortunately neither I nor most any of the commodity funds have the power to do that. The market is bigger than any one player, and if a few players conspire together to move prices, they'll be getting a visit from the FBI which could change their residence to Club Fed. Not only that, but if someone tries to corner a market, which is what you are suggesting, the exchanges can move in and stop the ruse. They did this a bunch of years ago to an Italian commodities trading firm, I think it was in the soybean market, The firm had bid up the price of beans with some huge purchases, all speculative. The CBOT then lowered maximum position limits and made the company liquidate a good chunk of their holdings. They also can raise margin requirements to stop someone from cornering a market, I think that's what the Comex did in 1980 to get the Bass Brothers out of their corner of the Silver market. 

Bottom line is price is ultimately set by the producers and end users. 

Now when companies start raising their prices and rents because your products are earning more, I am not sure what you can do about that. There are some ways top prevent it, but it depends on several variables and on you're being able to see what's coming before they do. I would imagine that before prices rise sharply and you see that coming you could buy some supplies early and extend your lease at current terms. Regarding landlords, I guess if prices rose significantly and he wants to raise your rent, as a last resort you could hire a couple of Italians from New Jersey to pay him a visit, as in the following video :

https://www.youtube.com/watch?v=8jqLeK6aP5s

[kyu2852570]

Ray is a hedge fund trader. You guys should be thankful for his insight, it’s very valuable. What’s it hurt to learn from it?

[cborman11]

Ha i'm reaping no prifits

[sw363535]

If he’s a hedge fund trader then he is not qualify to give commodity advice to ag producers. He knows as much about agriculture as politicians do about building booms.

[rayfcom]

You know, a day or two ago, giolukas asked me why I respond at times in a nasty way, and here is a good example of why. You sit there in your farmhouse happy as a bird in a manure patch on a cold night, singing your little head off about who is qualified to give you advice, not realizing that a cat is nearby. Little do you realize that you are a one-legged man in an *****-kicking contest.

First of all, I do not give advice - I express my opinions on what I see happening in the industry and I don't ask anyone to listen or follow what I write. That is completely up to you.

Secondly, you think you know your business but in reality you know only half of it. What you don't know is the dangerous part, the financial side, because that's the side that will destroy you. When corn trades below three dollars and maybe as low as two during the next two years, and you're still giving away half a dollar to your middle man who buys your product, and your expenses are the same if not higher than they are now, what the heck are you gonna do ? You have no plan other than to think it won't happen, but like the way the baseball always comes to the worst fielder in Little League even when you try to hide him in rightfield, the worst of all possibilities always happens at least once to every business. And the ones that survive that near death experience were the ones who planned for it and took precautions to limit its damage. 

Now you may be one of the lucky ones who has a wealthy wife or a big inheritance or a trust fund, but that's not the case for most small farmers. Most are struggling to make ends meet and when corn takes that dive into waters uncharted for over a decade, they will be in serious jeopardy of seeing everything they worked for their entire adult lives washed away under a mountain of expenses and not enough revenue. I try to warn you about what's coming and you make fun of me. Fine, we'll see how much you laugh when you sign the bankruptcy papers and the Sheriff starts auctioning off everything you own to repay some bank in New York. And when that time comes, when you see them hauling off everything you own and changing the locks on the front door to your house, then, yes then, you finally will realize that you should have paid as much attention to the issues I have raised here as you paid to writing foolish rejoinders to what I warned you about.

So go ahead, have your fun...you will live to regret it in a short while, because you are whistling past the graveyard.

[rayfcom]

You know, when times are tough, like now when prices are falling and production costs are rising, if you can just keep your head above water by doing the things that can help reverse that death march, then you're doing fine. You'll be in position to make a great profit once the trend reverses. The critical point is to survive the bad times when the rest of your competitors are crumbling, because then you'll have less competition and a lot more opportunities when times get good again.

You'll do all right, because you have an open mind and you're honest to yourself. And you're not afraid to try something new when you think there's a chance it will help your business. That's what makes a survivor, and survival is half of what it takes to keep a business successful.

[cborman11]

Hell id raise turnips at this point if i could make some extra money. I hear alpaca's bring good money on the sweater market.