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elcheapo
Veteran Advisor

The case for wheat

Hello.  I hope all had a nice Christmas.  We got a bit of snow (less than 2 inches) on Saturday that went on the fields, which we need.

I got to thinking and reading later this afternoon....kind of in a melancholy mood.  All the stuff has slowed down, everyone has left,

so here I set......thinking of the Christmas past, all the friends and family gone, the times we had in the past, and then thinking of

the coming year......with the projections of lower and lower prices.......I guess one could say, it's own right depressing.

 

Thinking back with my memories, my family has raised wheat for years.....my grandfather was born on the turn of the century, and

told stories of plowing with horses, and thrashing machines, etc.  Me, I came along a little later.....I remember as a young kid,

just before wheat harvest we would go to town to get gunnysacks.....or saved them when we bought 100 of potatoes and the like

used to be able to get the cloth at the lumber yard.  we would go home and get a couple of boards and put the sack between the

two, and nail it together....at harvest, you would put them at the endgate of the pickup and when the wheat was auged in

in the pickup, you would throw the wheat aginst the sack, and the sack would prevent it going out around the endgate.......

yes.....pickups were used in wheat harvest....usually 60 bu or so......would drive in, the lift would put the front of the pu in the

air and with the endgate opend, wheat went out.....nothing uncommon to see farm wives driving the pickup or maybe

a truck, with a scarf on their head......

I first started to cut  wheat with a 12 foot ihc 101 combine.....you kept going around and around and around and around.......

my dad had a bit bigger machine, and we kept my mom and grandpa busy hauling wheat to town........

((oh by the way, the 101 did not have a cab, and it was a treat to cut oats and milo with it !!))

 

fast forward to today, seems like everyone MUST have a semi.....straight trucks are becoming rare, and every combine has a cab.

 

last year, we were told, that the seeded acres equaled those in 1919......this year even less.........

sometimes, we have to put things into prespective....in todays world of fast data, and things over 20 years old are thought "old".....

we have to go back and get such a statement thru your head......

1919.........98 years ago.......98 years ago...........to give you an idea of what was happening then

here is a link to the 1919 sears catalogca

https://ia800500.us.archive.org/16/items/catalogno12400sear/catalogno12400sear.pdf

 

now, for the equipment we were using back then

 www.tractordata.com/farm-tractors/000/0/2/22-waterloo-boy-n.html

 

www.tractordata.com/farm-tractors/007/0/8/7081-ji-case-20-40.html

 

look at this......let it sink in.....the last time the planted acres of HRWW was when this equipment was used and prices were such.

 

this is frankly mind boggling.......but not to Chicago.....or cme or what ever in the#$@! they go under today......

 

this is SIGNIFICANT

 

but elcheapo......you don't understand.......we have a huge amount of wheat......and it's a world market..................

 

perhaps, but go get out your grain management handbooks........note how long grain can be kept.......then consider how it is now

being kept......on the bare ground.....with perhaps a fan running, covered with plastic..........think about that kids.........

most wheat is now kept in bunkers.......because it's cheap and easy.....now.......you want me to go out there, and get

a bucket full, and grind it and make you some bread, and some other stuff out of it ???

I didn't think so.

 

over time grain looses quality......but Chicago and the elevators want you to think not.

 

I had a snot nosed elevator manager tell me a while back, that you can keep grain in a bunker for 10 years and the quality not go 

down...........oh really........then why do they get rid of them as fast as they can ???

 

as far as the world market.......I' m out here in the middle of the united states.....within 100 miles of being smack in the middle

of the united states.......now tell me, i'm in a world market.......i'm miles from any way to ship via water, yet you TELL me that

I must be the same as somewhere thousands of miles away.....are you that stupid to believe that ??? yet every elevator, advisory

service , even professors and tv and radio people tells us......even our commodity groups..........

 

why must I have the same price as somewhere 2,000 miles away.......i'm sure everything is different there compaired to here....

my question, why isn't his price the same as mine here ????......the answer we want the cheapest.

 

I had a fellow from a major baking company tell me, the cost of the wrapper on a loaf of bread cost more than the wheat in it.

and that if wheat would double in price, it wouldn't be enough to justify raising the cost of the bread a couple of cents.

 

ok elcheapo.....we understand that now........

 

what can be done.........

 

good question..........

 

I already quoted this in another post

 

www.wunderground.com/cat6/us-drought-risk-rising-second-la-nia-winter-kill

then I suggest going to the following

 

 www.cpc.ncep.noaa.gov/products/predictions/90day/

 

play with that a bit......go thru all the months...........

 

notice something........notice how dry things are.....notice how warmer they are........and most of this is in HRWW country.

 

right now it's hard to find crop condition reports, so we have to "work around the edges"......read these two hay reports

 

https://www.ams.usda.gov/mnreports/dc_gr310.txt

https://www.ams.usda.gov/mnreports/am_gr310.txt

 

while these are hay reports........they give you an idea just how dry we are in the wheat production areas.

 

 

so here we are.......lowest numbers of acres than BEFORE 1919.......dry weather for months in the HRWW belt......and forecasts going

around for months.....shows a continued dry pattern........

 

to cut this short, I decided not link the soil conditions reports, which are significant.....much of the area has the topsoil and subsoil

in short to very short conditions......

 

here is something that many don't understand......when it rains.......the water goes down....many thought that they got a good rain last

year we are set.......no.....the subsoil is dry......there is no reserve......we have had a period of lower rain for YEARS......thusly

the subsoil is getting dryer all the time........those in Chicago can't understand that fact.......yes they might be getting rain in

Chicagoland but here in the plains........none.

 

so.........what is one to do.......CLEARLY there is basis for a VERY BULLISH outlook for wheat........BUT again and again, we are

told we have too much wheat, here an world wide........but this wheat is over 2 years old now (looking at the bump of the wheat produced

two years ago, and keeps getting dragged along in the carry over number").....

 

the problem is, if this is all true......how do we position ourselves to profit ?  some think the growing wheat is the way,

the only problem is, basis.......basis is the dirty little word in the grain business........we are seeing growing and growing basis

on crops, seems in particular in wheat......we are given every reason why.....no buyers, shipping cost, etc....etc....etc.........

i'm sorry, but you are frankly a bunch of red faced liers......and i'll tell it to your face and back it up.

 

not so long ago, I did it......an elevator man went and on.....well I called Kansas city, they told me they would buy all the wheat i

could send to them........as far as shipping.......I found out what the rail cost was.......

 

folks it's a joke how much we are being taking advantage of.......and not only that, what about the premiums for quality and protein.......

 

understand, these coops are using our money, our grain, and we are the owners......the amount of money being made is becomming

unreal.......how is it we can afford to build, buy new pickups for everyone, build offices, look at the number of people in the office,

secy, grain merchindisers, then we have a general manager, then a manager for each elevator, and then the fellows that do the

hard work of loading and unloading.......

 

where is the money going ????

 

so........can wheat do what it should........or is everyone with a hand out, and a bunch with lies, keep telling us no, and have us unload,

then wham, once they get control, the market goes up...........

 

yet we can not participate ???

 

at least those in fairy tales what had golden goose, didn't kill it, they kept it heathly and well feed......they wanted to 

continue to get more golden eggs.

 

but this bunch isn't that smart.

 

happy new year ???

 

 (((fyi the price support for wheat in 1919 was $2.26.............my quote for the day, $3.57....that's only $1.31 more an bu....and how much did it cost to put in an acre of wheat back then ????)))

 

oh yeah............things are SOOOO much better now.

 

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10 Replies
JimMeade
Veteran Advisor

Re: The case for wheat

In the 1950's and early 1960's, whole families went to the local dance halls on Saturday night.  Grandma, grandpa, ma and pa and the kids of all ages.  There was no booze served, but you could bet there were plenty of set-ups sold and the bottle in the brown sack was in the parking lot if not in the booth.  Men and older boys drifted in and out from time to time, coming back with a little booze on their breath.

There was sure to be a couple of square dances, polkas, waltzes, fox trots, two steps and slow dances.  For the kids there was the Bunny Hop. There'd likely be a Sadie Hawkins dance (ladies choice).

Then along came Elvis Presley, Rock and Roll, and the dances changed.  Duck tails and slicked back hair with combs going all night, belt buckles off to the side, heel taps, glass-packs, poodle skirts, t-shirts with the sleeve rolled up to hold the pack of Luckies.  Nothing but Rock all night.  Grandma and Grandpa, Ma and Pa and the kids quit going to the dances.  Only the teens and 20's showed up and they often didn't dance together.  You weren't sure who they danced with.

 

Elcheapo, the beat has changed.  Welcome to the modern dance hall.  We may not like it, but the old dance hall scene is few and far between.  Nostalgia doesn't sell.

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Whitesand_Farms
Veteran Contributor

Re: The case for wheat

 It makes me sick to call the elevator for wheat prices. It's funny we see futures prices and the basis but they never let us see port prices. All I know is when you add up the futures and basis it never equals port price. the basis Is just plain theft as far as i'm concerned. dockage is another joke I never see a pile of rotting screenings, no because that 1 or 2 or 3%dockage never gets separated out. Then drying fees and shrinkage just gets blended out, I hardly ever see the driers going. and lastly protein discounts now that's the biggest joke of them all. What's going to be the next magical discount they will find for stealing from us. I went for a drive and seen 6 new concrete terminals under construction and more concrete ones adding giant silo's for extra storage..... and there's no money in grain handling? All I know is seeing all this extra storage being put up means only one thing for me. That is lower prices. There will be no more price spikes from one company dropping the basis to source grain to fill a train or fill a ship because they will have enough grain on hand. I can't help but think the days of the family farm are almost behind us. I was quoted $675/tonne for phos and $995/tonne for NH3 and I'm supposed to pay the bills with cheap wheat? It's almost time for me to rent out to a BTO put my money in the bank and let him try worry about how he's going to pay for the 11 new combines.

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elcheapo
Veteran Advisor

Re: The case for wheat

good gravy marie !!!!!!

here is what I was quoted a few days ago on stuff

urea 350 a ton

11-52   485 a ton

10-34  390 a ton

28% N  203 a ton

 

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northnd
Senior Contributor

Re: The case for wheat

I haven’t checked input prices yet. No $ to prebuy them anyway.
But I am well versed on deductions to my hard red spring wheat!!!

Protein: -.06 a bushel per 1/4 from 14%-12%.
Vomatoxin: -.15 a bushel per ppm over 2.0.
Test Weight: -.02 a bushel under 58lbs.
Damage: -.04 a bushel each 1/2% over 1% damage.
Falling Numbers: Under 300 -.10 a bushel each 25 points.
Moisture: -.025 each 1/2% over 14% moisture.

and have to take wheat tax off that so they can eat steaks with foreign “buyers”.
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sw363535
Honored Advisor

Re: The case for wheat

northnd,

 

The biggest failure of usda (IMO) is expressed in the fact that there are no standards at grain buying locations.

 

Not only are many of those excessive, they vary at every location and change yearly....

 

Try to explain to anyone the deductions taken and the difference between elevators and end users.  It is impossible to justify or compare.

 

Simple moisture shrink, test weight and damage are different at every location...... That was not true 40 years ago.  It was regulated and following that regulation was necessary to to retain a license to operate...   as well as certified scales.

 

a local comparison for corn

 

Moisture Shrink

Feedyard end user --------- 1.2% of volume weight  per 1% above 15.5%   (considered standard 40 yrs ago.)

Ethanol plant------------------  1.37% of volume weight per 1% above 15%

Oklahoma Coop---------------  1.35% of volume weight per 1% above 15.5%

SW ks Coop........................  2.5% of volume weight per 1% above 15.5

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Whitesand_Farms
Veteran Contributor

Re: The case for wheat

Hahaha a friend said something funny this morning that I have to share. He said," pretty soon we will have to pay them to take our grain." And it's funny to me because that's the truth. We give them the grain even if we are losing money on it.
northnd
Senior Contributor

Re: The case for wheat

White sands + SW,

Both of your posts are very true. Get a year of lower protein and protein scales change immediately but they don’t fluctuate. Not done to specifically garner certain lots for mixing. Just a blanket bend you over. Then, below 14% never matches above. One local elevator has below 14% at -.06 a bushel per 1/4 and above 14% at +.02 a bushel per 1/4. This variation seems to apply magically to all the other discounts.

Weigh scales are another bend over job. I don’t buy into the cert companies and the accuracy. Last spring I was hauling to a local processor with a weigh scale and probe, then you drive to pit and dump, then you drive over a weigh out scale get your ticket and leave. Well, I got probed(literally and figuratively) weighed and went to dump. They had problems with conveyor and couldn’t dump so they told me to drive through and weigh out and come back around and skip the probe but weigh in again. Noticed that I was 500lbs lighter on the weigh out scale then the weigh in scale when I got home. Called and they matched the scales and paid me difference but there were 30+ trucks in line when I was there. Wonder how many got the shaft THAT day?

Lord, as I was typing this got a call from input supplier about rate jump. NH3 up to $465/ton and Urea up to $350/ton. Can pay 25% now and rest in March to lock it in cause it is projected to keep creeping up into spring. I wonder if I can use the wife’s tampons to stop rectal bleeding? Okay, that was gross but applicable.

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elcheapo
Veteran Advisor

Re: The case for wheat

 

in answer to your question...........yes

 

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sw363535
Honored Advisor

Re: The case for wheat

all part of the embarassment that is usda.   They want to be the unquestionable grain accounting organization for the worlds harvest, but can't handle setting grain trade standards or enforcing them in their own country.

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