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Veteran Advisor

Re: TID BITS

Rayf, now that post has some merit- not saying this isn't another opportunity to sell some more bushels of corn.  I am starting to wonder if some of the Dec. corn contracts will be delivered straight out of the field.  I hope I jest.  Regardless, don't see the storage problem we were looking at when it looked like the Iowa corn crop would be across the scales by the first week of Oct.  Adding a month of usage makes for a lot more room. There are still so many acres of beans that will slow corn harvest too.

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Senior Contributor

Re: TID BITS

Congratulations on that call in May. Once that outside day charted in late May, I remember thinking that it could wind up looking like the roller coaster fall at Great Adventure, and that was exactly what happened. 

 

The corn chart now is a lot more covert in what it is saying. You really have to look at the market internals to see the danger that exists. There's enough money on the sidelines that we could go either way from here in a big way, but there will be plenty of time to board the train if it all resolves to the upside. 

 

With regard to the farmers/producers, I have wondered for some time why the big farming concerns wanted to spend so much capital to buy into such low margin enterprises as small family owned farms. But after spending a couple of weeks here, I understand it a lot better. These farms have the potential for so much more profitability, if the operators spent even half as much time on the financial side of their business as on the farming side. The big firms have those resources and they understand the concepts of hedging, so to them, its not a low margin business but an under-priced business with high margins once they bring in their resources and knowledge base. You would think the small farmers would be willing to learn from what the big guys are doing, but I guess is really true that old dogs are reluctant to learn new tricks. 

 

We're in a world now where you die quickly in business - any business - if you don't adapt to the methods your competitors are employing. Its a shame, but the best farmers in the world will wind up working for someone instead of growing their businesses and profits and wealth, all because they don't want to adapt. I've seen this movie before, in the banking industry. If you ever saw how the community banks and the credit unions were run, you would never put a dime in them. Same story, they refuse to adapt...until a crisis comes along or a larger bank decides to buy them out. That's why there are about half the number of smaller banks today than existed 20 years ago, and why the larger banks keep getting bigger.

 

Bon chance !

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Senior Contributor

Re: TID BITS

From what I have been hearing, the harvest this year may wind up being a triage event if the fields don't dry out in  a hurry. Producers will sacrifice the bad for the good. I expect a lot more attention to the corn crop which apparently is in better shape than the soybean crop. Why waste time on bringing in a bean crop of which only 85% or less is deliverable, as opposed to a corn crop that is 90-95% deliverable. The situation with China also will play into this, as I read today that Chinese purchases of soybeans have slowed dramatically in the last two months. So here again, why harvest a damaged crop for which demand is falling when you can bring in a larger amount of the crop for which demand is constant ?

 

Now considering the two crops have risen about the same in price percentage since mid-September, and in light of my feeling that the soybean harvest will take a back seat to the corn harvest,  there may be a really good trade to do here regardless of the direction prices go. I am thinking about buying beans and selling corn. If the damage to the bean crop is at least somewhat equal to the reduction in demand from the Chinese because of the ongoing tariff issues, then the difference in harvest should make bean prices rise more than corn prices if overall ag prices rise from here, or conversely, corn prices drop more than bean prices should overall ag prices drop from here. In the best case, beans could actually go up while corn drops, that would be an early Christmas present. 

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Veteran Advisor

Re: TID BITS

You harvest what you plant. Whether you like it or not.
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Senior Contributor

Re: TID BITS

You may harvest what you plant, but the priority of what you harvest first is what I am talking about. And I am pretty sure that the profitable farmer harvests first that which will make him the most money. If its true that the soybean crop is more damaged than the corn crop, then it stands to reason that corn is coming in first or at least to a much greater degree than the beans.

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Veteran Contributor

Re: TID BITS

Ancedotal report, but I am hearing about 20-30% damaged beans in the Southeast, specifically along florence's path. As well as damaged beans in the delta 10-15% in most areas, it just never got dry enough, still fighting to get the moisture down. 

 

Combined with horrible river bids, this has lead to hoarding of soybeans in bins, and corn moving to the local elevators and feedmills ASAP. 

That's what I'm seeing and hearing at least, what that's worth to y'all, well take it with a grain of salt. 

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Honored Advisor

Re: TID BITS

When it's fit to harvest beans, the beans will get harvested. Corn can be harvested in far worse weather conditions than soybeans.  I'm not typing this for farmers. I'm typing this for those who don't understand the basic principles of harvesting.

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Senior Contributor

Re: TID BITS

"I'm typing this for those who don't understand the basic principles of harvesting."

 

So you went to all this trouble to teach yourself ?

 

There's only about 12 hours of daylight per day at this time of year, and no farmer could be that stupid to be harvesting a crop that is 15-30% damaged when they can spend the same finite amount of time harvesting a huge crop that is 90-95% deliverable. So the corn is coming in first, which means that supply of corn will be large and supply of beans not so large. That will widen the bean to corn price spread, meaning that buying beans and selling corn should ring the cash register.

 

Unless farmers are not as smart as I think they are. Could that be ???

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Honored Advisor

Re: TID BITS

The only way to truly understand farming is to live it.   Because the "12hrs of daylight" doesn`t mean it`s fit to harvest all 12hrs...you go where you can and when you can.   A dry well tiled field that had 2" of rain might be ready in couple days, where as a field 5 miles away might need another week.  Farmers around here will have beans as their high priority however, corn will go first, but the minute the beans are fit, you`d better switch heads and knock off all the beans you can as late as it`s getting.

 

Heck of it is beans should be about done by now and full concentration given to the poor stalk quality corn....but choices are going to have to be made.   Like the beans are 16% and it`s cloudy, but it`s going to rain 2" tomorrow...corn is tipping over and dropping ears with mold on them...that is going to be the choices in a week or two here. 

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Senior Contributor

Re: TID BITS

That's exactly the point I am making about a triage operation. The first crops you save are the ones you think have the best chance of making it to the market. And in the aggregate, it sounds like the corn crops will get that nod before the beans.

 

But perhaps there are enough good bean fields remaining that farmers still will be able to bring in a good amount of them. That would explain why beans and corn have risen by the same percentage since their respective lows on September 18, which also means that all the talk about how weather has damaged the crop already is factored into current prices.

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