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04-03-2017 09:46 AM
USDA is projecting soybean prices at $9.60 this year. University of Illinois thinks $8.95 may catch it and carry-out will be 530 million bushels. Many states are increasing soybean acres, especially the plains states that are getting out of wheat.
The result of a big soybean carry-out will be lower prices. Will there be more chances to sell or is it all downhill from here?
My bet is we'll get a chance a better money this year. I have no idea when or how much. I have an offer to sell beans and corn sitting on the books and hope they're hit. I'm long May wheat and hoping for a weather pop.
The problem with banking on a delayed planting scare is pushing the corn planting window might just move more acres and lower prices into the bean pit.
04-03-2017 10:04 AM
Figuring that the plains states will have national average yields may or may not happen. I'm guessing that the folks adding up what the acres times the national yield will be have not taken the dryland lower yield possibility into consideration. But of course, I could be wrong.
However, having offers and target prices in place is a smart move.
04-03-2017 10:22 AM
It`ll be what it`ll be. But traditionally any planting delay or wet weather rally should be sold. Since I apparently farm in the swamp (dang, I wish Trump would drain my swamps ) if I get a crappy yield because of the wet, most of the country is dancing a jig with a record crop. So, my take is most of this country`s farmland in on a gravel pit that does better with all this confounded rain, the national yield does better ....I hates the rain!
04-03-2017 10:43 AM
Farm on the hilltops and side hills, water just
Rolls off them.
I just don't know about these prices. I'm still puzzling
Over beans or Milo....Milo numbers looking better
But the big hold up the sugar cane aphid...Can add
$30 to $50 in added expense
Yes everyone says we need to be ready to lock things
In, but here is the problem.....When.....How do you know "when it's right"....Talking with my peers, it's similar, with prices so low, it's critical to get the
Best price, but how do you know !
You buy an expensive put, just to watch the market
Go up, the value of you put goes down, then you
Really are sick. I guess you could start to chase
The market and roll up, but that becomes expensive.
Then you could do all of this, then to be hit
With a huge basis...Or things change and the
Market price is the same you headed in,
So then you take out hedge cost, basis....Then
That's when the headaches and stomach pain starts
04-03-2017 11:04 AM
Tiger, you have an excellent point. Illinois used a quadratic trend line calculation because it better fits the data. USDA used a linear trend line calculation. But if the increased acres are in the Plains, your suggestion of more reasonable yields sounds to me like it should raise questions about whether the quadratic trend calculation is appropriate.
04-03-2017 12:02 PM
Well, just to be obvious, we are overdue for a sub-trend yield, regardless of which trend is used, thus using trend in soybean yields is patently over-confident. BUT, it cannot be disproved, and won't be, until August at the earliest. So, between now and then, it is the only yield anyone with big money will use. Fact of life. This creates opportunities for many, like buying ITM puts back then when there was no reason to think new beans would be worth $10 in April. Just none, COT data was terrible, momentum was terrible, china import tariffs on DDGS shift least cost ration to use less meal and more DDGS, bean basis was widening.
It likely sounds like I'm being an *****. Maybe, but the point is, pick a indicator, MACD weekly crossover, any of the above, just pick one and implement it, and then you won't be in Cheapo's position of doing nothing. At this point, beans are probably due for a bounce, who knows.
In this business, we get multiple chances each year to sell on rallies. Pick a tool and use it. I use timing, any tool is better than nothing, everyone is different.
Oh btw, Go ZAG's, let's see if the Jesuits can beat up the seculars. :-)
04-03-2017 12:42 PM
My thoughts as well. With bean price dropping almost a buck recently, milo has gained ground in the what to plant category. I will plant a certain number of acres to both either way, but am trying to decide on that last 20%. Do I figure on spraying for aphid on milo plus not have the option to go back to wheat, or take a chance on beans and hope we get late summer rains and the price holding steady. I know a lot of guys around here are going beans for two main reasons: 1)Sugar Cane Aphid, 2) Most farms set record dry land bean yields last year, myself included. One other important factor is your insurance guarantee's. I have had very good milo yields for the last several years which I figured with average yields for both crops gives milo around a $75/ac advantage over beans with my insurance. As always, you tell me what the weather is going to do and I'll tell you what to plant.
04-03-2017 02:09 PM
04-03-2017 02:13 PM - edited 04-03-2017 02:15 PM
There is just too much "Hill side seepage" to completely drain the swamp, pun intended. Raining here to with field ponds starting to show up.