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Veteran Advisor

Good Think that we have Slow Joe

If we had Joseph Stalin in charge, we would be forced to empty our grain bins and get some of that fake currency that is supposed to represent real value in return or get shot or sent north to Siberia.

 

Soybeans are like gold...they have intrinsic value and cannot go to zero value unless you let them spoil. Same with corn.

 

THe market's goal is to make sure that any farmers holding soybeans feel that the bird in the hand ( the $15-$25) represents more than the potential bird in the bush ( $????). This is capitalism at its finest. Statism would decree that you had to deliver them when and how the government specified.

 

Somehow, I get the feeling that end users would prefer the heavy hand of Statism on some days and weeks.

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Honored Advisor

Re: Good Think that we have Slow Joe

These are all very good posts with lots of different views.  We have a system like no other and while it has flaws from time to time, there is no better place on earth to make a living.  

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Senior Contributor

Re: If the USDA willfully distorts reports

Krafty you sound like my neighbor. He sold all of his corn last fall for 4 dollars a bushel cause he believed all of the USDA reports and the analysts that said it was going to 2.50. He is still trying to make me believe it was a good moveSmiley Happy
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Senior Advisor

Re: If the USDA willfully distorts reports

USDA does have price projections but I've never heard much talk about them as a serious topic. But I've heard more farmers talk about 'watch out below' than any other group. Those in the paper business as advisors often talk about the risk of this and that, and suggest what one should do - hedge, what else? If one is sensitive to risk one should maybe listen.

 

And of course there are traders, and those who get material from traders w/o asking many questions. Traders have the most creative stories without a doubt. It might be worth doing something like the 'Ignoble Prize' only using the best story from a floor trader as the basis for an annual award.

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Senior Advisor

Re: If the USDA willfully distorts reports

Just a point of interest on the prospective plantings, it is another report where the word "predicted" does not appar.  The word "predicted" is added by other commentators for their own purposes.

 

Here is an example of the wording for corn.  Soybeans and wheat are identical:  "Corn planted area for all purposes in 2014 is estimated......"

 

Estimated.  A good, accurate description and a word that we would all take with appropriate caution in developing our own plans.

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Senior Advisor

Re: I guess I've seen it all

I would say it is in the consumers interest to have the acres planted. There is nothing sinister about that plan. A plentiful food supply is in all our interests unless your think the USDA has a sinister objective to impoverish farmers. Does that confirm why  they have been shoveling buckets full of cash out to grain producers for decades.

 

Here we are at $5 corn and $14 beans and we think that government is trying to suppress prices. Just what do you think should be the right numbers?

 

 

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Advisor

Re: I guess I've seen it all

As I've said too many times, in both 2000 and 2004 there were conspicuously bullish revisions of some of USDA's numbers that were later revised back out. Whether the fact that those were presidential election years had any bearing, I obviously can't say.

 

But anyway, my largre point is that if USDA sometimes gets it wrong (or lies, with an agenda), they might sometimes be doing so in your favor.

 

Which, as I've also said, I've never found a single solitary farmer to agree with me about.

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Advisor

Re: I guess I've seen it all

Which, btw, is why thinking that you know is an analytical trap to be avoided.

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Senior Advisor

Re: If the USDA willfully distorts reports

Joe---Once a sale is made I don't have regrets. It's History and my focus goes to the next deal. A number of years back i dumped my whole soybean crop for $8.15 and soybean prices went to the teens before it was over. $8 was a good sale in those days but of course the ride on the bull would have been highly profitable.

 

But I don't regret deals I've made good or bad because I never expect to hit the high or close to it. Sometimes you just want to lock in a profit when you are less than certain about future direction I certainly could afford to sell those beans at $8, but sure would have hated to take $7 when I past up the opportunity for $8.

 

I really don't care what others do. If they get more or less than I do does nothing towards my financial well being. I sure don't want anybody to take less to prove I am right. This marketer is wrong alot but I have kept the bills paid and money in the bank with the mortgages paid. That is my measure of successful marketing. I am not going to get it all but hopefully I will do well financially.  Now should a 75 year older make the down stroke on another 80 or should I just bask in my comfort zone?

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Honored Advisor

Re: If the USDA willfully distorts reports

Then who is the beneficiary and what would be a government employees motivation for doing that?  Job security is a solid motivator.  Laziness is a solid motivator for lack of accuracy or lack of budget.  Beneficiary the one who gets paid for dependable data and the farmers who sit around "betting" on the report.  Like the guys at the local cafe who have a half dollar bet on when the cook will show up this morning.

 

If i am doing my own yield projections and price predictions, I am really taking a shot in the dark. There would certainly be nothing exact about it nor would I expect it to be.  But there would be the attempt to be accurate for your own benefit.  But if you are projecting for a mass area like the state of Iowa you will loose focus on accuracy and rely on the law of averages, stop caring about the weather and devalued curency.  And be careful not to report things that might get you in trouble and prove to be inaccurate. --- Like droughts, shortages, inflation, etc.

 

Yet it seem to be a strong notion amongst producers that the evil government is try to screw us over. I don't beleive that there is a concerted effort by government to screw us over. They take the numbers and make an assessment and they report it.  Your reading your own posts there Kraft.  Those are the labels you through on a decenting view.  If a producer sees that inflated production costs have made the $4 corn equal in buying power to $2 corm 12 years ago, and thinks that will change the level of production adjustments, and thinks that usda is living on 1970's production standards ---------- He is not a thinker in usda "worship" terms, he is an "evil government" believer.

 

Now crops may or may not measure up to predictions, but it is not an exact science. If you know better, explain how it works. Who is doing the dirty to farmers and why?  USDA is because they are the ones who most believe that these numbers are truth and project them as such.  Maybe that is just an ego trip or an attempt to make a boring job seem worthwhile,  who knows.

 

the wording of this first sentence tells it all "crops may of may not measure up to predictions".  ------- It is the crops fault the prediction is inaccurate??????   Public service should at least serve some benefit to the public.

 

Things we never discussed in times of overproduction and surplus.  But then we didn't really need the reports to learn anything,  we were more concerned with finding a storage spot for our just below the COP grain we produced.

 

Now usda is the focus of big bets and entertainment.  If you really need to find grain or a market for it, usda can't tell you where to go or how much is there when you get there.

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