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Re: Soybean Marketing Plan
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Re: Soybean Marketing Plan
This forum tends to think they are all rich and economics don't affect production....yet they go ape and plant more corn over a new ethanol plant. go figure...
In kansas wheat acres are down so production will be down...... Corn acres are down some every year because of water restraints and COP. And Bean acres were up last year and expected this year because Cargill(crushing most of our bushels) is setting records on negative basis because they think they will get more than they want.....I am not sure that is true, 3 years ago they would send trucks to pick it up at harvest 200 miles west..... this year they don't offer anything....make unfounded claims about truck availability in April for fall delivery.... Acres may not be there and will not if wheat corrects. And for sure if corn keeps going up. Feedlot markets out west are pricing corn now for fall north of $4.45....... a bean basis of -1.45 will affect planting this spring. It is a local issue (we outproduced Cargill locally) but not a national issue...... but it affects acres.
The US Grain user side of the market has real competition and has nearly maxed out production. Beans have run on thin carry for a long time. We can produce more, but only at the expense of something else. China and usda are keeping the cotton acres steady and up. Ethanol and corn are married and a 3 million acre shift will make that market take notice... But 3 m acre shift only adds 150 million bushel to the bean supply. Not a surplus builder...
If south american bean production is down,,, as it obviously is, and china needs to make up the shortfall and answer some criticism over trade deficits, we do not have the carry to accommodate.
It takes a lot of "betting on the come" by usda and the buyers to overlook the obvious.
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Re: Soybean Marketing Plan
Well the bean plan worked to perfection, What we need now is a plan to manage
the weather risk, which is huge at this point.
I like the SU900 calls for 20 or so since we are playing weather roulette.
🙂
A better buy is to sell some 840 SU puts and buy some 840 calls (keeping the
10.30 hedges in place if you are conservative.) but I don't have the cash flow
to fund that if beans go to 6.80. So, I'll take the bad delta and the wasteful
OTM calls. Just deduct the .20 from our average price isn't too bad.
Sometimes swinging for the fences is the right thing to do. Between 7/1
and 8/17 this year could easily be such a time. My timing and VR's is really
quite different this year. After this decline, and maybe we go sideways a few
weeks, but then, the demand side is stronger than the supply side most
likely, so we could rally more than some expect.
Crops that look great in June seldom yield great, probably 50/50 as I calculate
it. Price is already trading the 50% perfect ending. Thus logic would tell us
that anything on the other side of 50% perfect growing conditions is not
bearish price, at least not by much.
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