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Veteran Contributor
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Registered: ‎09-09-2014
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Floor Talk November 13

[ Edited ]

At the close:

At the close, the Dec. corn futures finished 1 1/4¢ lower at $3.42 1/4. March futures settled 1 3/4¢ lower at $3.55. Jan. soybean futures finished 12 3/4¢ lower at $9.74 1/4.  March soybean futures finished 12 1/2¢ lower at $9.85 1/2. December wheat futures closed 7 1/4¢ lower at $4.24. Dec. soy meal futures finished $3.20 per short ton lower at $311.30. Dec. soy oil futures closed 0.48¢ lower at 34.33¢ per pound.  In the outside markets, the Brent crude oil market is $0.04 higher, the U.S. dollar is lower, and the Dow Jones Industrials are 29 points higher.

 

Mike

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At mid-session:

At mid-session, the Dec. corn futures are 1¢ lower at $3.42. March futures are 1 3/4¢ lower at $3.55. Jan. soybean futures are 8 1/4¢ lower at $9.78.  March soybean futures are 8 1/2¢ lower at $9.89. December wheat futures are 5 3/4¢ lower at $4.25. Dec. soy meal futures are $2.00 per short ton lower at $312.50. Dec. soy oil futures are 0.43¢ lower at 34.38¢ per pound.  In the outside markets, the Brent crude oil market is $0.08 higher, the U.S. dollar is higher, and the Dow Jones Industrials are 17 points higher.

 

Mike

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In early trading:

At 9:00am, the Dec. corn futures are 1 1/4¢ higher at $3.42. March futures are 2 1/4¢ lower at $3.54. Jan. soybean futures are 2 1/4¢ lower at $9.84.  March soybean futures are 2 1/2¢ lower at $9.95. December wheat futures are 8¢ lower at $4.23. Dec. soy meal futures are $0.30 per short ton higher at $314.80. Dec. soy oil futures are 0.29¢ lower at 34.52¢ per pound.  In the outside markets, the Brent crude oil market is $0.12 higher, the U.S. dollar is higher, and the Dow Jones Industrials are 5 points lower.

 

Mike

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Grains and soybeans were lower in overnight trading on a stronger dollar and as the harvest nears completion. Wheat lost about 5 cents, corn was down about a penny and soybeans lost about 2 cents overnight. President Trump is wrapping up his Asia trip, and it had its ups and downs. The U.S. signed agreements with China to sell about $5 billion worth of soybeans to the Asian nation. Late last week, 11 countries signed off on new framework for the Trans-Pacific Partnership, without including the U.S. As a reminder, the U.S. backed out of the agreement earlier this year, putting its existence in jeopardy. In weather news, it's reportedly foggy in much of the Midwest this morning. Rainfall is forecast for later this week for much of the central and eastern Midwest, which could keep growers who have corn left in the field from getting to it. See all the details in today's 3 Big Things at: https://www.agriculture.com/news/three-big-things/3-big-things-today-november-13.

 

Brent Crude Oil = down 0.1%

West Texas Intermediate = up 0.1%

Dollar = up 0.2%.

Wall Street = U.S. stock futures lower in pre-market trading.

World Markets = Global stocks lower overnight.

Veteran Advisor
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Registered: ‎10-18-2016
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Re: Floor Talk November 13

Best of luck on all who have corn in the field.  My tile are not running and moisture is welcome here.  Next spring is coming, ready or not.

 

Combines have been running hard, but I don't have a good feel for how much is left.

 

Several local elevators are halting corn intake or are requiring call-ahead.

Advisor
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Registered: ‎06-25-2010
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Re: Floor Talk November 13

"The U.S. signed agreements with China to sell about $5 billion worth of soybeans"  

 

And soybeans is down 2 cents.  To take a line from Illinifarmer, Crooks Smiley Happy

Honored Advisor
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Registered: ‎01-10-2012
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Re: Floor Talk November 13

Copy and paste from another source , not me but good points, 

 


"1. Have a WRITTEN plan. Put it on your wall. Read it every day. Follow it. Patton said a good plan violently executed today is better than the best plan never executed tomorrow.

2. Know your costs. Start selling when you can make a profit. It is crazy (greedy) not to lock in a profit. Baseball games are won with singles and doubles, rarely grand slams.

3. Know your cash flow needs. Plan ahead.

4. Divide your expected APH bushels into 'cookies' (5-10-20 different portions you are willing to sell at different times and price points). Don't feel you have to go all or nothing.

5. Lock in your margin when you buy inputs - if you buy some NH3, consider pricing an offsetting amount of production.

6. Separate futures price/speculation (options, CME futures, unpriced grain in a bin) from carry and basis decisions. Separate timing when setting futures and basis.

6a. Grain bins are generally free, the market will often pay you to store, condition, and bring your grain to market later, but you have to understand and lock in basis and carry.

7. Tread lightly with options. Options = buying insurance. Insurance isn't bad, but most insurance expires worthless.

8. Use any crop insurance in your marketing plan - if you price up to your covered insurance bushels, you have removed a significant amount of risk since you already bought offsetting insurance

9. Have faith in yourself when you forward sell. If you have enough faith to put out money to raise a crop, have some faith that you'll have at least half or two-thirds if a crop, even in a bad year (2012 and other notable busts notwithstanding). Play the smart odds here. (Don't be dumb like me in June 2016 and refuse to sell any corn - dumb, dumb, dumb).

10. Price during seasonally strong times, especially when you can earn risk premium from the market due to unknown future conditions (acreage battle in March, weather market in May/June)."

No name to give credif

Veteran Advisor
Posts: 2,892
Registered: ‎02-11-2013
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Re: Floor Talk November 13

Or blame ?
Honored Advisor
Posts: 7,602
Registered: ‎07-18-2011
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Re: Floor Talk November 13

[ Edited ]

giving blame or credit is actually the same exercise.................... depends on the attitude of the person passing the responsibility.  Smiley Happy

 

Honored Advisor
Posts: 15,051
Registered: ‎05-13-2010
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Re: Floor Talk November 13

I think the market the last couple years has "taught" growers to not be greedy and just watch come next July any nickel thrown to the corn market will be snapped up like Pavlov`s dogs.  We gotta stay greedy to make up for all the money we lost being greedy the last couple years!!!   Smiley Happy  

 

But here`s the dilemma (and it looks like `18 might not be much different).  We get to July and the market goes up because it hasn`t rained much in a week and the forecast is ify and China buys a bunch.  Now, the RA guarantee will be below most of our "honest" costs of production, the market rallies close to our C.O.P and we`re supposed to be "yippee skippy, I`m sellin` my APH!!".  Well let`s say you sell 150/bpa corn at $3.50 and instead of getting 220, you really get 150 and the market rallies to $4.50.  True, insurance bails you out but you`re still in the poorhouse missing out on selling your 150bu off the combine for $4.50.  

 

The only way it works out contracting below your RA guarantee price and honest COP is a year like this where you sell the 150/bpa at $3.50 and sell your extra 70bu for $2.90...I guess it`s better than selling all 220 bushel for $2.90 but all that monkeying around just to stay in the poorhouse???

 

It`s like at the blackjack table "stand on 16" well sometimes you gotta hit at 17.   Smiley Happy 

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Re: Floor Talk November 13

put options

Veteran Advisor
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Re: Floor Talk November 13

Retired ag economics professor Bob Wisner of Iowa State recommended put options as a year in year out strategy for those who wanted a simple plan.  His discussion is still available online, I think.

Highlighted
Veteran Advisor
Posts: 951
Registered: ‎10-18-2016
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Re: Floor Talk November 13

Some observations, not about Hobby but about the list.  There is nothing wrong with these lists if they make us think.  Here are some counterpoints not to argue with the other list but simply to present other views that we see and we have to sort out.

 

Copy and paste from another source , not me but good points, 

 


"1. Have a WRITTEN plan. Put it on your wall. Read it every day. Follow it. Patton said a good plan violently executed today is better than the best plan never executed tomorrow.

 

“No Battle Plan Survives Contact With the Enemy” Helmet Von Multke, German general staff

 

2. Know your costs. Start selling when you can make a profit. It is crazy (greedy) not to lock in a profit. Baseball games are won with singles and doubles, rarely grand slams.

 

This is fine if  your profit point is lower than your competitor, but if not you are ensuring the competitor can always undersell you and you end up with a bin full of grain at the end of the year and no where for it to go.  I think sometimes you sell for the most money you think you can get and are willing to accept.

 

3. Know your cash flow needs. Plan ahead.

 

True.  Should start with thinking about having milk cows and hogs again so we have constant income.  Not just how to market grain.  In other words, the big, big picture, not just the big picture.

 

4. Divide your expected APH bushels into 'cookies' (5-10-20 different portions you are willing to sell at different times and price points). Don't feel you have to go all or nothing.

 

Don't rely on judgment, use a formula.  Smiley Sad  Formulas are what is left when we can't figure anything else out.  Yes, sometimes we use them.

 

5. Lock in your margin when you buy inputs - if you buy some NH3, consider pricing an offsetting amount of production.

 

I've never found it possible to do this.

 

6. Separate futures price/speculation (options, CME futures, unpriced grain in a bin) from carry and basis decisions. Separate timing when setting futures and basis.

 

Don't speculate in the first place.  Hedge.  Farming is speculating.  Marketing should be hedging.

 

6a. Grain bins are generally free, the market will often pay you to store, condition, and bring your grain to market later, but you have to understand and lock in basis and carry.

 

True.  Grain bins, after harvest, are a marketing tool and nothing else.  Their use involves opportunity and  risk.

 

7. Tread lightly with options. Options = buying insurance. Insurance isn't bad, but most insurance expires worthless.

 

100% agree if buying.  If selling, well, that is speculation and makes one a trader.

 

8. Use any crop insurance in your marketing plan - if you price up to your covered insurance bushels, you have removed a significant amount of risk since you already bought offsetting insurance

 

Crop insurance costs money.  I am not willing to pay money to buy courage.  If I need to pay for someone else's courage, buy as cheaply as possible.

 

9. Have faith in yourself when you forward sell. If you have enough faith to put out money to raise a crop, have some faith that you'll have at least half or two-thirds if a crop, even in a bad year (2012 and other notable busts notwithstanding). Play the smart odds here. (Don't be dumb like me in June 2016 and refuse to sell any corn - dumb, dumb, dumb).

 

Agree.  I did well in 2016 and made good money in the market.  I missed the 2017 soybean price by 3 cents - could be a lot of money ahead.  Spilled milk now.

 

10. Price during seasonally strong times, especially when you can earn risk premium from the market due to unknown future conditions (acreage battle in March, weather market in May/June)."

 

Agree 100%.  Farmers want to have their cake and eat it too.  We pay for crop insurance so we can forward price our production, and then we want harvest revenue so we don't even have to forward price.  At some stage in the game, this is a commodity business and we have to be better than the next guy and we have to make marketing decisions based on our confidence that we can outperform the market.  Insurance of any sort cuts back on net return.  We are not Henry Ford.  We can't quit making cars.  At least not in the short run.  In the long run, you are right, some of us will no longer be making cars.

 

 

No name to give credif

 

Again, this is not arguing with Hobby - it is offering other views that are worth considering.  Wouldn't it be nice if there was only one, right way?