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Honored Advisor

Re: New lows, new lows

Nutlug,

 

Great post.   

It is where many of us live in marketing reality.

Keep in mind that most of the strong bears and bulls are speculators only and don't even follow the weather ---- nothing invested, nothing lost and the whole process has come down to riding the trend driven by large money funds.  They are still arguing a phantom crop made up of harvest acre numbers that fall all over the place, and yields based on the best crop we can find.  Of the two the yield may be closer to real than the acres.  ---- but so far it is just speculation and your getting it because they do not have a marketing strategy,( they can sell), that works when the COP is $1 a bushel over the market price.  So you get a lot of rear view mirror "you shoulda done what I woulda done".

 

Watch the basis locally,  It is the best clue to where the market should be going and how close we are to trend change.  We are on the early end of harvest and so far we have finished our first 6 locations  --- yields are 115,165,132,101, 151,158, ------same 6 last year 221,207,212,176, 187corn  & 68 bu beans.

Some of this reflects storm damage and some of it reflects the diminishing water supply in the west.  Both of which affected many more than us.  Believe what you want, but I agree with you there is way too much arm wrestling on this marketing site and very little marketing advice.  It is a waist of our time when some light weight quotes himself to make a meaningless point.  They have nothing to offer to a marketing site.

 

I think the best thing you can do right now is reduce spending on anything extra and try to retain control of your production as much as you can as long as you can.  We are cheap enough now crop insurance is going to pay for half of the price loss and corn prices are low enough the wait won't be too long before this crop is gone and the trend changes.  It makes no difference what is raised in SA as long as our crop is cheaper to sell than theirs and I was reading an article this morning explaining how total transportation costs were lower in the US --nearly $50 per metric ton higher from Mato Grosso to Shanghai than from Sioux Falls to Shanghai.   economics don't change.  And current economics will reduce supply, either our production will drop of it will be cheaper to buy than to produce worldwide.

 

 

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