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Honored Advisor

TID BITS

Massive supplies is the buzz word phrase.

 

Ecin isn't busy with his grain trucking business

 

Here in South Podunk Country we are in a definite surplus grain situation. Problem is we are hundreds of miles from the areas that need this surplus.

 

Our basis improved a penny to minus 24 this morning, but to.counter act this trend from getting out of hand they are offering free dp on corn in this morning's text message.

 

The Gavilon terminal offered free bean dp end of last week. 

 

Suppose there really is as large of a surplus as advertised? This is still Feb and the tricks are in force.

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5 Replies
Senior Advisor

Re: TID BITS

Hobby ,Good comments - And I have wonder the same thing - I would say that is the east most part of the state - say around the Portland , Union City area that the bins are dry - rumor has it - yet this this one of the hardest hit areas from spring rains .

 

cardinal is at + 25 - it was +31 not long ago , yet there's nothing moving ????? I have to wonder if this is there way to gear down some and wait out any that do's have grain and will need some cash going into spring - It has been and always will be   most part a game between us and the grain companies - as in who will blink first - many times it not that there smarter than us in marketing - but the key is there pockets are often deeper than our's - well I should say mine anyway - I live in Indiana - not Iowa - home of the deep pockets -- Smiley Wink Smiley Happy

 

At Bunge - there played the F-DP thing and of course it worked - farmers just hate to see the hired guy sitting around on a pretty winter day when they could haul beans in and screw any chances of a basis increase but at least they don't have to baby sit  - But anyway they are getting in around 200 trucks a day they say - being that none of the other commercial 's are  hauling - it must be farmer owned . Yet As I checked out the bulk load site yesterday  , there were looking for trucks to haul beans from Brazil IN to Mt. Vernon ( Ohio River ) - And its a lot more miles to the river than Morristown - So somebody needs beans to go down the river or bean meal - the buyers also crush .

 

M-town Grain - same deal - F-DP and boy it was nice weather here 2 weeks ago - the worse place to sell grain and they were hauling to who tied it - Because it was free and they didn't want to just sit on there thumb anyway , that is what one guy told me .

 

Well better get - had the best day I have had in 3 weeks ! ABOUT TIME  - had to have surgery -------- AGAIN on elbow and this time when I woke up , not only was there 3 pretty nurses -- I also had a cast on my arm from my fingers to my shoulder - Ken about s--t the big one over that one ! Anyway - they took it off this morning , and looks like its going to heal this time - also had infection in it and the anti's are doing there job - as the infection is all but gone . So  maybe - with fingers crossed - I will be ready for spring 2016 .

 

btw - boy it's a pretty day here in East Central Indiana - Smiley Happy

 

 

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Honored Advisor

Re: TID BITS

A two to three week supply in the end users hands seems to be all it takes to get the shrug off in prices.

 

Ran into the Dow seed dude at the Farm show in D.M. last week and bought some of my corn needs for $160 for the RR stuff. Didn't see much money changing hands up there except at the tool booths and the over priced food vendors. Farm Credit Services was giving away stocking hats....hmmm....a sign of a cold reception for their customers?

 

With the last few days financials action, a little duck and run seems to be in play. Gold and silver seems to be acting like it is real money. The central banks ponzy scheme may have about run its course. Just too much debt piled upon debt. Not enough producers, too many non producers or hanger oners. 

 

This may make the eighties seem like a cake walk.

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Honored Advisor

Re: TID BITS

By Marcia Zarley Taylor
DTN Executive Editor

HADDONFIELD, N.J. (DTN) -- Three straight years of falling farm incomes are beginning to extract a toll.

The outlook for ag credit conditions deteriorated sharply in late 2015, based on a fourth-quarter survey by the Kansas City Federal Reserve. Bankers expected a surge of farm loan demand and loan renewals and the steepest drop in repayment rates in the last decade, the survey found.

 

A similar survey by the Chicago Federal Reserve found 5.0% of the volume of its farm loan portfolio had "major" or "severe" repayment problems, up from 3.9% a year earlier. Lenders in the central Corn Belt anticipate that 2% of their current customers would not qualify for additional operating credit for the 2016 season.

 

Meanwhile, the St. Louis Federal Reserve, which covers all or parts of seven Midwest and Midsouth states, also found loan demand climbing and repayment rates slipping.

 

All of those factors indicate "pressure is starting to build on some farm borrowers," said Nathan Kauffman, Omaha branch chief and assistant vice president of the Federal Reserve Bank of Kansas City. To date, however, commercial banks continue to report low delinquency rates and a portion of their borrowers with very strong credit.

 

Persistently low prices for agricultural commodities set the tone for the Fed's surveys. From January 2015 to December, feeder cattle prices plunged more than 25%, causing significant damage to cattle margins. National average prices for soybeans and wheat dropped 14% and 19% respectively last year. Average corn prices hovered about 40% below their 2013 levels. Meanwhile, production costs have been slow to adjust, pushing many operators into the red.

 

The Kansas City district covers a swath of states from Oklahoma to Montana, including irrigated corn production in Nebraska and Kansas. That means it's a good proxy for both Grain Belt and livestock credit conditions, Kauffman added.

In addition to concerns over credit quality, Great Plains lenders expected farm and ranchland values to sink below 2014 levels in all but Oklahoma. The Kansas City district averaged a 4% annual decline in nonirrigated land, while irrigated slipped 2% and ranchland held steady. The volume of farmland sales also dropped in 2015, lenders said.

 

Prices for quality farmland in the St. Louis Federal Reserve district -- which includes Arkansas and parts of Illinois, Indiana, Kentucky, Missouri, Mississippi and Tennessee -- fell 2.5% in calendar 2015. In the Chicago Federal Reserve district -- which includes Iowa, part of Illinois, part of Indiana, Wisconsin and Michigan -- "good" farmland fell 3% in calendar 2015.

 

"A more limited supply of farmland available for purchase, then, may partly explain why farmland values have retracted only modestly" from recent peaks, the Kansas City Fed said.

 

Kauffman is watching the outcome of cash rent negotiations this spring as the next warning of farmers' well-being. "Will some producers walk away (from high-priced rents)? Were others waiting in the wings to pick up last-minute deals? In the past, somebody has always been wanted to expand," he said. Given that USDA expects major crop cash receipts to slide another 9% in 2016, big spenders may be hesitant to outbid their rivals this time.

 

Based on conversations with lenders, Kauffman believes there's a "small but modest group of borrowers who haven't done their due diligence. Their 2016 plans don't cashflow. Some of that reflects that fundamentals don't support their business," he said.

 

On the other hand, there's a large subset of farm borrowers in a good financial position who could benefit from a turnover in land rentals or ownership, he said. He expects them to weather the setback.

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Honored Advisor

Re: TID BITS

Guys there is some good normal thought behind some of these issues....

 

1  Ethanol production is high.......... and it should be if gasoline is cheaper than it has been in years, usage should be high.  The roads we drive are crowded and gas is cheappppp and one out of every ten gallons is ethanol..

 

2.  Buyers are getting plenty offered to them and there is no reason to buy a month out as long as crude oil is falling....  Until something huge happens in exports ...

 

3.  I called today......... Diesel fuel can be delivered to the farm for $1.10 per gallon..... But the response was "not yet, it's going lower... but fill up time is coming....

 

4.  It is a buyers market.... and of course our competitors is SA will soon be anxiously loading every boat they can get for whatever price they can get.  And then there is the posibility of just importing ethanol from them for probably cheaper than we can make it....and it will save jobs and all those miles on trucks we can't afford..............and we can be assured that half of the population of the US doesn't understand what is wrong with this senario....

 

5... Glad your better ECIN,,,,, avoid curveballs and sliders for a couple of months

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Honored Advisor

Re: TID BITS

"Lenders in the central Corn Belt anticipate that 2% of their current customers would not qualify for additional operating credit for the 2016 season"

 

Based on the rumor mill, wonder what % of their loan volume that 2% represents. The article said there was rapid deterioration of balance sheets and profits at the very end of 2015. Been no improvements in prices since then. 50% of the large operations right in this area are known to be in in the 2% they represent more than two percent of the average borrower's loan needs.

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