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ShelladyOptions
Senior Contributor

OptionEye....June 25th

Good morning.

 

Great day to be a bull...or long..or both.

 

Weather still the driver behind the price rises. Corn up 23, Nov beans up 44...wheat following up 17. There doesn't look to be any relief in the short term and these price swings will continue. Still, I think there is more room to the upside.

 

Big week or couple of weeks ahead.

 

European summit at the end of the week Thurs and Fri. USDA report on Friday as well as non-farm payrolls next Friday. We could also get a ruling on Obamacare so we have something for just about everyone.

 

While I have been going on and on about Europe I am becoming increasingly concerned about the US economy slipping into a recession and stealing Europe's headlines. Watch this space.

 

 

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9 Replies
Hobbyfarmer
Honored Advisor

Re: OptionEye....June 25th

I do not believe we are slipping into a recession.

 

It has already happened. The loud thud just hasn't happened yet.

 

The only bright spot in the whole economy is taking it on the chin right now. If you haven't guessed it, it's the farmer.

 

There is no way that with at least 60% of the bread basket in one of the D's of the Palmer drought index and more at the door step of the next step UP the ladder. The suppliers of the farmer are all going to come to realize that the money flow has/is being turned off in farm country. The final straw that overloads the camel will be loaded on later in the next month or two when some Narcissistic politician installs export controls on farm products.

 

The amount of near new equipment that will show up on dealers lots and at auction this winter and next spring will be astounding. The difference between the '80's and now will be the newness and large size of the available iron.

 

There has been WAY TOO much crop contracted at below the cost of production.

 

Many believed the so called experts (definition... ex = has been  spert= drip under pressure) and believed the road had no bumps, curves, or hills in it and have very little reserve for this perfect storm.

 

This is just my opinion and worth every penny you paid for it.

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Buckley_HF
Senior Contributor

Re: OptionEye....June 25th

Hobby. I dont really disagree with anything u stated, that having been said had a quick discussion with a buyer today that said there has been almost a historic lack of producer selling for this new crop. Not just for our area but nationwide. So are guys contracted for under COP? I'm sure some are. Others are probably thanking their lucky stars they havent done anything because 30% sold a month ago could be 100% in a few short days. It would be interesting to know for a fact how much new crop is priced at this point. Maybe the farmers were smarter than the "experts" this spring...
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GoredHusker
Senior Contributor

Re: OptionEye....June 25th

I don't know where anyone would get the idea that people are heavily contracted.  Here anyway, there's been very little forward contracted.  This is why new crop corn basis has been very attractive just trying to lure in some sales.  Locally, I doubt any more than 20% has been forward sold.  Most of this was sold last August.  There's still a fair amount of old crop corn in bins.  The basis started sliding a week ago, and it just continues.  Rumor has it one of the local ethanol plants just sold a bunch of old crop corn back which is why our basis has been in retreat. 

 

In terms of farmers being smarter than experts, I don't know.  However, why would anyone get wild selling grain below the spring insurance price?  I'm sure there's a fair amount of sales going on today, and I'd be willing to bet there's a lot of orders resting around the 6 buck mark on new crop corn. 

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Hobbyfarmer
Honored Advisor

Re: OptionEye....June 25th

B; I sure for their sake hope so. Just reading this site and the push by VR and even the management of this site that has be indoctrinated by the "Corn college" types of "sell before you plant" I;m hoping most farmers are farmers and not just "growers"

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GoredHusker
Senior Contributor

Re: OptionEye....June 25th

Maybe my mind is a bit foggy, but I remember a lot of the ones saying to sell was clear back in August when Dec. corn was almost a dollar higher than it is today with the limit up move.  I don't remember much rhetoric on selling when we were considerably below the spring insurance price. 

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Buckley_HF
Senior Contributor

Re: OptionEye....June 25th

Well said hobby
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kraft-t
Senior Advisor

Re: Yes $6.50

May 23 I deposited  the $6.50 corn check in the bank. Now on the brink of wide spread drought the local coop is still 7 cents per bushel short of that.

 

Of course the potential for further increase is probable but we didn't know that in May. I don't know how you bet on crop failure when most of the time we do get rain throughout the season.

 

Perhaps that s why USDA has high expectations because they know the odds are strong that we will get adequate rain and crops. Would you bet most years that we would not?

 

Perhaps some of you might be ready to admit the possibility of the existance of global change.

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Buckley_HF
Senior Contributor

Re: Yes $6.50

Gored, watching market to market every week and reading a lot of analysts, everyone and their brother was saying record acres record production record yield this spring and u better make sales, yes even when prices were under insurance guarantee. Forward contracting is useful and good for the guys that sold off the combine this past fall for 6.50+. I doubt it was many though. Hard to contract a bunch before u know insurance price or u are still 6 months away from pulling the planter out of shed.
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NDf
Senior Contributor

Re: OptionEye....June 25th

Crop insurance= hardly any farm failures. Any farmer really had to over extend themselves the last few years not to have enough cash on hand to not be able to take one bad year bad marketing wise or a crop failure wise. Sure there are some going on more than one year with a crop failure and I feel for them, but the majority aren't So I'm not going to have anybody feel sorry for me if I don't get a crop this year crop ins won't make me whole' but it comes darn close.

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