Sunday night opening guesses

[jennys_mn]

It's no big deal c-x-1 : Let It Go

Jen

[ehoff]

Jen, I said commodities are homogeneous not commodity markets. #2 yellow corn is #2 yellow corn and there is gonna be 15 billion bushels available in this country. In commodity markets high prices cause overproduction as witnessed in grains worldwide and now possibly oil also as the United States is now self sufficient in oil for the first time in decades. That was caused by prices going high enough due to worldwide demand and speculator interest. Now the shale oil, bakken, and fracking are economical and thus we are self sufficient. Oil price will now probably seek its cost of production due to overproduction due to high prices. That means lower prices probab;y. Grains are doing the same thing. The reason commodity prices eventually reach higher plateau prices is because they are denominated in dollars and the United States has devalued the dollar some 92% since we went off the gold standard. Thus producers of commodities need higher prices to stay in business. From 1968 to around 2006 corn price moved in a price range of 1.65 to 4 bucks. That price began to readjust in 2006 and the high of the range for the next 20 years was established in 2012 at around 8 dollars. The low of the new range is gonna roughly be 2.80 to 3 bucks which is defined by the lowest cost producers.

  The easy years of grain marketing are over for grain farmers. Next year could be the real painful year. That is if farmers survive this winters markets. You see, for the last many years if a farmer didn't sell ahead they could store and get a great return. Thats not gonna happen this winter imo for many reasons.

  As to the price of food ..... you can make 40 loaves of bread out of a bushel of wheat so at its high price of 14 bucks a bushel there was 35 cents of wheat in a loaf of bread. At todays wheat price of 6 bucks there is 15 cents of wheat in a loaf of bread. Miniscule to the price of bread. The largest costs are labor and transportation and marketing and none of them are going down. You probably will see meat prices drop over the next 2 years as hog and cattle prices gravitate toward their cost of production. fwiw

[c-x-1]

YEAH 89 - something is a weighing on the S & P tonite --- holding down 7-8 handles after 73 min now.

THAT is approx = 55 DOW PTS.

[Silverwheaton]

Jen, Jen, in the short run, markets go up and down.  Who says corn is going to $2.00. That speculation.  My target is 2.90 and from there we go to say 6.00 to 6.50 by 2016.  So yes it works in the corn too if that is where we go.

[jennys_mn]

OK then - let's stick with the one market, gas and oil. So, we're not paying to buy it from overseas, we're not transporting it, electricity to crack it has been stabile, inflation has supposedly been near 0 - yet, here we are, with gas costing consumers nearly twice as much as a few years ago.

You talk in the earlier post about risk. Let's talk about risk. The amount of risk a farmer has hanging out there year after year cannot be compared to someone who sticks their neck gambling on the futures market. A farmer doesn't get the chance to set their ROI, they don't ever produce something and say, "My costs are this, my salary is this, and my return on investment is this, so the cost of my commodity leaving this yard is this." And, maybe, that's the point as farmers, that we need to get to. The guy with the milk truck made more than my neighbor who milked the cows. And who had the bigger investment? The farmer, overall, has been exploited by many, many entities for a long time. I as a farmer never got offered a fishing trip, but my salesman selling me the seed corn sure did. I'm out of farming, glad I am. But still willing to stand up for everyone that farms. This argument I will not back down from. Farmers, in my book, have been exploited for long enough.

Jen

[jennys_mn]

OK, if what you say is true, then every farmer out there should bin, lock, go on vacation and build some more bins for next years crop, and then do it again. I knew someone that did this for beans some years ago, and had 5 years worth of beans that he sold for $14.00 a bushel. Yet many on here say to sell, sell, sell. If you're right, they should hold, hold, hold.

Jen

[OKdon]

I agree with you Jen!  I live in Bixby south edge of tulsa. My name is don kraft from North central Iowa and i don't care who knows it.

[Silverwheaton]

That goes without saying!  Hey Jen, if your on here for the long haul, print out the prediction and save it.  In two years lets talk and see if it was right or wrong.  If it is right, would you say that markets are somewhat predictable?

[c-x-1]

is that you krafty? - someone was just asking 'cause we hadn't heard from ya in a while.

you used to farm and rent out now or what's the story-if it's you, just glad your ok man!

[jennys_mn]

Thanks Don.  Oh - and on those shorts vs. parkas.   I did see more shorts than parkas.  I saw only 1 parka the last few days (early morning gate guard in the rain) and several pairs of shorts at the fair.

Jen