cancel
Showing results for 
Search instead for 
Did you mean: 
hardnox
Advisor

Marketing in the trough of the commodity cycle

Seems to have occurred about on script- a 30 year commodity cycle is complete. We had our 10ish years up and are now collapsing into the basement where we'll likely dwell for 20ish years and then repeat.

 

The window to make radical adjustments to operations in anticipation is closing up.

 

The thing about the 20 year downleg of the cycle is that it tends to be punctuated with a lot of volatility and it is a challenge to protect yourself and simultaneously remain open to the brief but big upside moves that will happen. That probably means advancing sales in future years as far as you can when profitable levels present.

 

And it requires the capitalization and cost structure to withstand periods that may run 5 years or more between pops.

 

PS. Mostly weather will dictate but in an idealized version we'll strike a significant commodity low later this year or early next and then bump along for another 15 or so with some spikes along the way.

0 Kudos
3 Replies
hardnox
Advisor

Re: Marketing in the trough of the commodity cycle

PS. Strategically speaking the thing to be doing is planning for how to make large forward sales when there's a pop- finding OTC, HTA or lending relationships in advance.

0 Kudos
hardnox
Advisor

Re: Marketing in the trough of the commodity cycle

Good news also, that we're already 4-5 years past the peak, but on the other hand the big gains don't ususally come until the last 5-7 so 20 years isn't too far off.

0 Kudos
juliedavis91849
Veteran Contributor

Re: corn acreage "JEOPARDY"...EPIC BATTLE

 

acreage "jeopardy", ja

 

1 million acres of corn planting is behind in Missouri and Kansas..

 

another 480,000 acres behind in Dakotas..

 

fewer and fewer planting days left...

 

If Bulls win the acreage battle, corn could be headed considerably higher.

 

If Bears win, we head down into the abyss.

 


 


 

 

 

0 Kudos