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Honored Advisor

Tid bits

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MARKET COMMENTARY April 16, 2014

 

Raymond Jenkins

 

We must be heading into a holiday weekend. The reasons for price action seem to be less plausible as we approach the three day holiday; maybe it’s just ok to say that folks want to reduce their risk exposure, and that normally means selling something instead of buying at this point in the crop growing cycle.

 

If you are holding onto old crop soybeans you are “happy, happy, happy” this week as many places now have $15 cash bids or very close to it.

 

Corn futures seem to have found a comfort zone around the $5 level as we wait to see how quickly the new crop acres get planted this spring-----and how much moisture we get to replenish dry soil conditions.

 

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Nope not happy, not sad I sold off the combine either. (did not do that). My guess there are way more unhappy $13 sellers than happy $15 holders.

 

BTW Ray J thanks for the daily comments.  

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Honored Advisor

Re: Tid bits

This is the "sure" program talked about in another thread...

 

The Secretary of Agriculture and the President felt it was imperative to provide livestock producers across the country with relief.  Which is why, these four programs were debuted first. 

 

 

 

“The programs we’re unveiling today are the Livestock Forage Program, which has been a part of prior Farm Bills;

 

the Livestock Indemnity Program;

 

the Emergency Loss Assistance Program for Honeybees

 

and Farm Raised Fish;

 

and the Tree Assistance Program,” she says.

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Honored Advisor

Re: Tid bits

Looks like cash cheese has turned around
After steadily declining for a couple of weeks, prices have been increasing in the cash cheese market this week.

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Senior Advisor

Re: Tid bits

You have no idea what a relief it is to hear the news on the cash cheese market Hobby.  My wife was getting tired of charging it the past couple of weeks.  She'll be glad to hear she can start paying cash again.

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Re: Tid bits

Feds accused of leaving trail of wreckage after Nevada ranch standoff

 

The federal agency that backed down over the weekend in a tense standoff with a Nevada rancher is being accused of leaving a trail of wreckage behind. 

 

Fox News toured the damage -- allegedly caused by the Bureau of Land Management -- which included holes in water tanks and destroyed water lines and fences. According to family friends, the bureau's hired "cowboys" also killed two prize bulls. 

 

"They had total control of this land for one week, and look at the destruction they did in one week," said Corey Houston, friend of rancher Cliven Bundy and his family. "So why would you trust somebody like that? And how does that show that they're a better steward?" 

 

The BLM and other law enforcement officials backed down on Saturday in their effort to seize Bundy's cattle, after hundreds of protesters, some armed, arrived to show support for the Bundy family. In the end, BLM officials left the scene amid concerns about safety, and no shots were fired. 

 

The dispute between the feds and the Bundy family has been going on for years; they say he owes more than $1.1 million in unpaid grazing fees -- and long ago revoked his grazing rights over concern for a federally protected tortoise. They sent officials to round up his livestock following a pair of federal court orders last year giving the U.S. government the authority to impound the cattle. 

 

The feds, though, are being accused of taking the court orders way too far. 

 

On a Friday night conference call, BLM officials told reporters that "illegal structures" on Bundy's ranch -- water tanks, water lines and corrals -- had to be removed to "restore" the land to its natural state and prevent the rancher from restarting his illegal cattle operation. 

 

However, the court order used to justify the operation appears only to give the agency the authority to "seize and impound" Bundy's cattle. 

 

"Nowhere in the court order that I saw does it say that they can destroy infrastructure, destroy corrals, tanks ... desert environment, shoot cattle," Houston said. 

 

Bundy's friends say the BLM wranglers told them the bulls were shot because they were dangerous and could gore their horses. One bull was shot five times.

 

But Houston said the pen holding the bull wasn't even bent. "It's not like the bull was smashing this pen and trying tackle people or anything," he said. "The pen is sitting here. It hasn't moved. No damage whatsoever. Where was the danger with that bull?" 

Plus he said BLM vehicles appear to have crushed a tortoise burrow near the damaged water tank. "How's that conservation?" he asked. 

 

The BLM has not yet responded to a request for comment on these allegations. 

Bundy has refused to pay the grazing fees or remove his cattle, and doesn't even acknowledge the federal government's authority to assess or collect damages. 

 

The bureau has said if Bundy wasn't willing to pay, then they would sell his cattle.

 

However, there was a problem with that plan -- few in Nevada would touch Bundy's cattle for fear of being blacklisted. 

"The sale yards are very nervous about taking what in the past has been basically stolen cattle from the federal government," Nevada Agriculture Commissioner Ramona Morrison said. 

 

Documents show the BLM paid a Utah cattle wrangler $966,000 to collect Bundy's cattle and a Utah auctioneer to sell them. However, Utah Gov. Gary Herbert refused to let Bundy cattle cross state lines, saying in a letter: "As Governor of Utah, I urgently request that a herd of cattle seized by the Bureau of Land Management from Mr. Cliven Bundy of Bunkerville, Nevada, not be sent to Utah. There are serious concerns about human safety and animal health and well-being, if these animals are shipped to and sold in Utah." 

 

That letter was sent three days before the BLM round-up, which is why the cattle were still being held Saturday in temporary pens just a few miles from Bundy's ranch. Morrison says BLM was sitting on cattle because it had no way to get rid of them -- setting up a potential tragedy as orphaned calves were not getting any milk and feed costs were about to skyrocket. 

 

The showdown is far from over. The BLM says it will "continue to work to resolve the matter administratively and judicially," though Bundy still doesn't recognize federal authority over the federal lands that he continues to use in violation of a court order. The federal judge who issued that decision says Bundy's claims "are without merit." 

 

That order from October 2013 says Bundy owes $200 per day per head for every day he fails to move his cattle. That amounts to roughly $640 million in damages owed to the federal government for illegally grazing his cattle.

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These people need black listed from ever eating meat again. Except turtle meat

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Honored Advisor

Re: Tid bits

"You have no idea what a relief it is to hear the news on the cash cheese market"

 

It is on marketing and glad I could be of assistance.

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Veteran Advisor

Re: Tid bits

Ill admit I have not kept track of this story
But I don't quite understand how the rancher
Does not accept the bomb ownership
Of the property. I do not understand the
idea of not paying for the grass. He did
Not pay pasture rent, nor if he owned it,
he should have paid property tax.

I have been doing both for years.

But I will say there would be a better
Way to handle it.
first, almost 1 million to load up the cattle?

The fellow should have woke up when he
Got two federal court orders......
What did his attnory advise. ?
Just how I see it but I could be wrong
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Honored Advisor

Re: Tid bits

The story I heard that wasn't mentioned here is that it was NOT BLM land but state land and he had pd that rent. BUT the Feds turned these turtles out a few years ago and now they are claiming eminent domain for a "protected" species. The story was that they were afraid the cattle might step on one.

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Honored Advisor

Re: Tid bits

 

 

soy.jpg

 

 

soy1.jpg

Bean/Corn Ratio

Let’s look at a chart that shows the long term bean/corn ratio. First of all, let’s note that at the upper end of the ratio, bean prices are three times the price of corn that would give us a 3 to 1 ratio. That’s where we’re at right now with old crop May soybeans and old crop May corn – the ratio is over 3 to 1. That means beans are very expensive in relationship to corn here at least in the nearby.

 

At times where corn is twice as expensive in relationship to beans or being relatively cheap compared to corn, we would see a ratio down towards the 2 to 1 ratio. There, beans are just two times the value of corn.

 

When we look at how the bean/corn ratio may affect the mix of acres, whether or not some acres may get switched from corn to beans or from beans to corn, we need to look at not the nearby ratio, but the new crop ratio.

 

The red line on this chart is the new crop 2014 ratio. This would be new crop November beans divided by new crop December corn futures. It’s worth noting that a year ago during the planting season of 2013, we had a ratio around 2.2 to 1. That was relatively low and indicated that corn was fairly high priced in relationship to beans and that may have encouraged a little bit of additional corn acres last year. That ratio has been increasing and we’re currently trading at a about a 2.5 to 1 ratio. That tells us that the marketplace may be encouraging a few more bean acres even though we really don’t need it.

 

USDA is currently estimating that bean acres will about 81.5 million. That could leave ending stocks up to around 350 to 375 million bushels. That would be the largest stocks number in 8 years and the ratio is still rallying here as of today which could be encouraging even more acres. The long term ratio is not supportive for bean prices going forward even though a nearby rally in soybeans right now is pulling new crop beans up as well.

 

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Re: Tid bits

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