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giolucas
Veteran Advisor

Do we really need to buy acres?

With the amount of acres for wheat, corn and soybeans do we really need to have them buy up acres for each commodity?  I thought we have enough acres that can bring more than ample 2012 supply at these current prices.

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10 Replies
noreaster
Frequent Contributor

Re: Do we really need to buy acres?

Depends on export demands.........

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roarintiger1
Honored Advisor

Re: Do we really need to buy acres?

Corn acres are already bought.

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ne 50
Veteran Contributor

Re: Do we really need to buy acres?

Are you sure... I'm thinking of shifting some corn acres to beans because of the threat of drier weather..

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kraft-t
Senior Advisor

Re: Do we really need to buy acres?

According to yesterdays close decembers corn is 46 centls lower than march corn.  November soybeans are 3 cents higher than current soybeans. I guess they are trying to buy bean acres.

 

Am I the only one that discounts the notion of buying acres? The market trades and growers respond to market values. Some do and some don't. I don't know anyone that makes a conscious effort to increase or decrease plantings by buying or selling futures.

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Jim Meade / Iowa City
Senior Advisor

Re: Do we really need to buy acres?

My subjective impression is that for most of us in the heart of the corn belt, acres don't get bought.  They stay about the same.  Having said that,I'll turn right around and admit that for the first time in 6 years, I am thinking of planting some corn on corn, so I'm making a liar out of myself.

At the same time, as another posted, I'm not set on that with the weather pattern.  I may back out of the COC and stay with 50-50.  Not sure yet.   

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sw363535
Honored Advisor

Re: Do we really need to buy acres?

Kraft,

That's the way I see it also.   The corn dec. position is not inspiring with costs up.

Imo---When the choices are all in a profitable range, then price is not buying my acres,  risk  and reward is where my mind goes.

Corn reward has to be high enough to justify the additional risk of its high input costs.

Also, we have seen a lot of years when beans were not that profitable but good for the rotation and soil.

To have a year when we can lock in a profitable bean price, build soil for the next year, handle stress, and lower costs.

Beans look good to me not because of the market, but because of the corn expenses and risk in marginal areas

Like Jim says, the marginal areas is where the acre swing--------and that is where the risk is at its highest.

 

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GoredHusker
Senior Contributor

Re: Do we really need to buy acres?

According to Roach Ag. Marketing, the national average basis for corn is roughly 12 under for corn and 45 under for soybeans.  I can't speak for all areas, but around here 200 bushel corn is comparable to 60 bushel soybeans.  Using March to March futures, 200 bushel corn grosses roughly 1260 bucks an acre while 60 bushel soybeans grosses roughly 705 bucks an acre.  There's absolutely zero way I'll ever have over 550 bucks an acre more into corn than soybeans.  Using new crop with local basis, I can gross 1050 with corn and 675 with soybeans.  There's no way I'll have 375 bucks more cost into corn than soybeans.  I read an article from I believe the University of Illinois that stated corn profit for 2012 would be 90 cents per bushel while soybean profit would be 60 cents per bushel.  90 cents multiplied by 200 is 180 bucks an acre profit compared to 60 cents per bushel multiplied by 60 bushels per acre is 36 buck an acre profit.  Apparently, it isn't just here where we can't pencil it out to even begin to think about planting soybeans. 

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roarintiger1
Honored Advisor

Re: Do we really need to buy acres?

Again......the corn acres are already bought.

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sw363535
Honored Advisor

Re: Do we really need to buy acres?

Gored you gotta figure it from the cost side.  200 of your 375 is in fertilizer and chemicals alone--add 120 of extra water pumping and  40 for seed costs ---we'll get there pretty fast.  we still got the handling charges on 200bu compared to 60, additional storage requirements, drying charges, etc etc. 

I qualified it to marginal acres------you won't find anyone caring about pumping costs in U of Illinois.

 

Try figuring the dryland corn breakeven in western Ks and Eastern Colo. thats where the marginal bump in corn acres come from when corn price gets high.   

 

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