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Veteran Advisor

Something rotten in chicago

Hello boys and girls......well one of our elevators broke the $4.00 mark for wheat....a few short months ago wheat was

6.30 and we all we're told it was going to be another short crop again, elevators even cut back their help.......

 

i need someone smarter than myself to tell me when we were at these levels, and what did the S&D numbers look like ?

 

you even look at the USDA data and it says the low on the farm gate would be 4.30.....well kids, been there, done that.

 

of interest, one county FSA office was having producers signing paperwork for LDP !!!!

 

I feel there is something amuck in chicago in the wheat pit......we did away with kansas city, all went to chicago, now, there

is no human in the chain.......

 

the question that must be asked, is there some sort of market fixing going on ?.....everyone keeps saying lower....

 

can giving such advice by a number of people meet the test for market tampering ?

 

with everything in computer now, just how are we to prove there is something going on ?

 

 

my take is, yes things in the world are great, but they are not that bad.....with wheat this low, it should be in many feed rations,

 

and in theory, should be used up soon.  but, still alot of other grains being feed.  if you look at the S&D numbers, things

 

are not that much of a burden.

 

Lastly, down hard today, but far more than beans or corn.....the neg news was for them, but the favorite whipping is wheat.

 

with these numbers much of the plains will be hurt, and are hurting.  everyone hollers plant more corn or beans, but

 

alot of areas just don't do well, then the next fool will say it's "marginal ground", and should be put out of production,

 

but, in a "good" year (whatever one of those look like), you can get  60 to 70 bu.

 

 

something is wrong

 

and when it's getting everyones attention on the price how low it is, that means there is a problem.....

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4 Replies
Advisor

Re: Something rotten in chicago

I have heard rumblings also about the ldp paperwork myself. Interesting, I thought.
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Senior Contributor

Re: Something rotten in chicago

Local elevator price for wheat is $2.64, basis is $2.00 under Chicago. With low test weights and vomotoxin it could cost you to sell your wheat.  Patrick

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Veteran Advisor

Re: Something rotten in chicago

Crop insurance should pick up the quality issues
Unless you had really good yeilds

I did not understand the post...is the bid 2.64?

And is the dock $2 ?

Net 64 cents ?

I think that should be triggering ldp
And also should be triggering your state farm bureau...note I say should
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Veteran Contributor

Re: Something rotten in chicago

I am not a wheat grower, but I can relate to corn and bean prices and our inability to grow wheat,

For us wheat is a loser, so we either continue to be losers or do something different

You said in a good yr. what?? 60-70 but my question is, what is that land going to produce in a 5 or 10 yr. average

You can't live on one good yr. in ??? if all the other yrs are a crop failure,

I am assuming your soil does grow wheat and is not ripped up hay and pasture that had no business growing wheat,

If chicago goes to 4.00 and cash is 3.00 in your area, then that is what wheat is worth

If chicago is a bunch of computers that know nothing, then your basis will eventually find the real value

That is why you need bins, to wait and see what wheat, corn or any crop is really worth

You may not like the price, but we have to live in the world, as it is and not what we think it should be, so get over it and do something constructive, for your farm. I don't know what that might be. That is your job.

Example: In our area, you all know what chicago corn is priced at today

But, we have a local shortage of corn, until new crop, so, basis is doing the job

Basis is bringing corn in from a long way away, or out of some bins closer and that cost money to move it that far, or buy it

So: corn has found it's value, regardless of what chicago thinks, and it is a lot more than chicago price

Last yr, it was beans

Chicago went down, but bean meal went up until new crop came on line

Now that doesn't happen every yr. but basis does have a way of finding the real value

By the way, this yr, there is not so much, if any, premium on beans, thus I asume the crushers have enough beans and the cash price reflects what beans are worth to them. I sold in July for 2.00 more than today cash price

Chicago has no bearing on price so much as basis does, to find real value

Ever seen chicago go up and basis go down, thus cash price may go up a tiny bit, or maybe not at all

That is why, basis is the real price finder at the farm gate and chicage is a short term lagging indicator

As for all this noise about what the world supply may be or not, it is your job to ignore the noise and make sales when you have a profit. How much you got vs, the coffee shop price is just bragging and won't pay the bills. If you want a bit more profit, nothing wrong with that. But falling in love with grain in the bin has cost a lot of people a lot of money

And, selling on the down side of a high price is not a complete failure, compared to not doing anything, but hoping for what??

If you get lucky, then good for you, but don't be getting all greedy or you will pay the price 

If the coffeee shop all got 1.00 more, that is okay, at least you are still in the game and making some progress

Like the casino, nobody talks about how much they lost, just that one night at the table that won you 500.00 while ignorig the previous 5 times they lost 500.00 There is always somebody that will win 500.00 and 3- 5 more that lost 500.00

Basis and a decent price is what you work with and ignore, for the most part what they do in chicago

You will feel a lot better about the whole thing, and maybe make better decisions, if you make sales that look decent to you and your farm

Some yrs that decent price just isn't to be had, but it is the same for everybody, so decide what you need to do, and let the coffee shop do what they think is best. There is a reason they are in the coffee shop, and a reason why you have a rainy day fund, for the yrs, that the price just never got there

And thank your lucky stars you have decent crop insurance

In my part of the world in canada, corn and bean crop insurance is a loser, when averaged over any time period or 1 yr or 10 yrs

Try farming with no crop insurance and see what that feels like

And we get burnt up, flooded, hailed just like any other farmer, which makes that rainy day fund so very important

Both my son and I lost 1/3 of our corn the very 1st yr. we had a crop of our own and crop insurance would not have paid the premiums for that yr

We had yields of 30, 70 and 120 bu. of corn on that hailed out crop, and no 6.00 corn either

We both dad to turn the operating loan shortage into a long term loan to survive the lost crop

Try farming with those kid of conditions, wilst you folks complain about price, as if that is your only problem

Our rents go up to 300/acre on 200 bu or less corn ground, depending on rain, so we don't find any relief in lower land values with some land pushing 20,00 and average of 12,000 in our immedite area with maybe 160 yield of corn.

I know, and does not compute, but somebody is always coming out off the wood work and buying land

Price can be managed, weather can't, so control what youu can and don't sweat that which can't

End of rant, but enjoy what you have

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