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BA Deere
Honored Advisor

Ray Grabanski is bullish

He says consider owning 2 years of crop.  Angie Stetzer (grain merchandiser) isn`t too thrilled with talking farmers into holding tight.  I suppose it`s easier to pluck the pigeons when they give up hope?

https://www.agriculture.com/markets/analysis/farmers-should-consider-owning-two-years-of-production-...       

snip

Why am I bullish? I have noticed some positive developments since last May that I cannot ignore: 1) Soybeans bottomed on monthly charts, with an upside reversal in May 19 that has not been violated to date. In fact, the uptrend line has held through the past nine months perfectly.  2) Corn broke out of a five-year bottom range last May, projecting improved corn prices the next five years. 3) Trade agreements galore have been approved in the past six months, including Japan, Mexico, Canada, and China – our biggest trade partners. 4) More trade agreements are likely, including Phase Two China, the United Kingdom, and the EU.  5) We came off a disastrous production season last year, with 20 million acres of PP (almost 10% of corn/soy acreage) and 5% below trend yields in corn and soybeans. Do we really have plentiful supplies? 6) It’s likely we’ll have 10 to 20 million acres of PP again in 2020 with some adverse spring weather.

 
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6 Replies
k-289
Senior Advisor

Re: Ray Grabanski is bullish

Nothing  like  a  drought ,  will  send  the  bears  hibernating   - unfortunately,   the  true  producer  marketing  friend  -  -  -

This  isn't  a  fox  entertainment  opinion  -  -  - 

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rickgthf
Senior Advisor

Re: Ray Grabanski is bullish?

Bullish or Bull*****?   "Do we really have plentiful supplies?"  Yes, we do, more to the point, so do Brazil & Argentina.  "Trade agreements approved galore" and so what?  You know we're in trouble when his rally depends on "It's likely we'll have 10-20 million acres of PP.....with some adverse weather."

 Oh, by the way, he left out the most important news, " Putin endorses trump for re-election".

 

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BA Deere
Honored Advisor

Re: Ray Grabanski is bullish?

It depends on your definition of "bullish".   I`m not bullish enough to hold 2 years of crop nor do I have the space or the input cash without selling.   There are strategies to get $4 for this year`s crop, with 50¢ open at the top and mind you this is in a $3,60 Dec cash bid...your bids may vary. 

Beans are $8.50 cash Oct.  Well, 50 bushel yield $400ish to play with .  $50 seed, $20 Enlist spray, $200 land, $50 mach, $30 ins, ect = $350 expense you pencil in $50 over expense  * Iowa State tells me it doesn`t pay to fertilize beans on optimum and above fertility. 

I don`t know but I think Bloomberg could even make these numbers work. 

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sw363535
Honored Advisor

Re: Ray Grabanski is bullish

Appreciated entry......

Angie seems to avoid factual details and chear for usda's version of what might happen in the future.

Ray seems to be looking at a known fact in each point.

If you want to farm on social media follow angie.

 

Thanks BA

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sw363535
Honored Advisor

Re: Ray Grabanski is bullish

Rick --- critique the issue fairly........ do you hold usda and angie to the same standard of criticism that you just did Ray.

Do we have a large supply of production that is not "hot" in the bin.. or already owned by an end user?  Most all ground piles in Kansas are promised to a local end user --- ethanol or feeder or both.  The pictures here are usually ethanol/feeder owned.  Is that supply available?    Brazil, how much of its production this year is available to a new buyer?  If I committ 200 acres of production to a specialty corn contracted to an ethanol plant is that part of our supply?  No.,, it is not available to buy.  Yet that ethanol plant uses that pile every day to tell its customers the price isn't going up.  Yet if bushels are needed to feed on the farm the price is +.85 at the elevator --- if they have some in open storage available to sell.  That will take a day or two to discover.  In microcosm that is where we are.  

Gavalon in Iowa...... that huge ground pile of beans that leaves for the coast regularly---- is it part of the "supply" .... no. But in Angie's world it is because it is there and her assessment of farmers is just a bit lower than Bloombergs.

Angie is a paid merchandiser, who on earth thinks that is a source of information on available supply?  In the US we have no idea what our available supply is.  Most of it at harvest is in the gripps of end users &    "Possession is 9/10 of the law"  ......... or in Oklahoma Keith terms  "Sheee's Gone".  You hope they are still writing checks when you need to sell.     This is one accomplishment of USDA, they hide the ugly reality with future fiction.

She will argue against Ray every day of every year...... Ray is getting out of line here.

Yet I have been hurt by Rays thought process for the last three years..... and I have bins, and some good connections to end users ........ a formula that would have been a winner in SW from 1955-2000 every year.  But not now.  I have been burnt by the power brokered monopoly system ever since Congress began micro managing our economy by destroying small business and paving the streets for the new monopoly structure.  At least that is who I like to blame.  When regulations stop all new feedlot development, do they stop.  No  not if the new owner can grease enough congressional election pockets his permit can expand.  

I think Ray has good valid points but most of agriculture is nearly out of chips and struggling to ante up for another year, making it hard to place that bet.

It is all just two things ....... supply   and demand.....  Philosophically, we have way more demand than supply.  Demand has it's grip on every crop before it gets planted.  They finance inputs, they cost share technology, they provide transportation of crop.  They bend over backwards to keep the next crop coming.....and prod congress to help you .

If there were really an over abundance of supply...Angie wouldn't feel the need to banter with farmers.  and the folks that pay her way wouldnt need to hire personal to tell you to forward contract before the price changes.  an abundance of supply is what usda says just before their numbers say we have a 45 day supply of carry.

Maybe we are as dumb as bloomberg says  or even as low as angie thinks.  --- Im starting to feel sorry for Mike he paid a lot of money to derate farmers .... Not Angie, she's getting paid to do it.

timetippingpt
Honored Advisor

Re: Ray Grabanski is bullish

Excellent points SW...."ample supply at 45 days"....comical if you have ever not had a supply of something you needed.