After two USDA reports that just whipsawed the markets down and then up...and when it was all said and done the markets closed around where they were at before the two reports, I am having some frustration with the power of these reports. Given that since January they are been many such market movers.
Then I came across this article. To think, that all these diesel engines have had millions/billions spent on meeting new clean air standards....and that was all based on a false study by CA government.
CA clean air regs have been screwing the US for too long...why do we follow a state that is broker than broke? People start complaining about the cost of food....these 'manufactured' regs are a big part of the cost increase. The cost of trucking affects most every consumer good many times over. Think of what would happen if cap and trade passed. Electric rates have already gone up this summer. Does the government ever consider that it is some of their own policies that cause the problems for the people trying to pay the bills.
OK, rant over.
I really think the internet is so valuable to marketing....in 1993 we had to wait until Nov. to react to the poor yields. With the internet we aready had a good idea in Aug. With all the old carryover, what are the good areas doing for storage this fall?
Re: USDA/government "regulation"
In terms of your diesel engine rant, I've always had problems with their pollution studies. I've never understood building an engine to reduce pollution by 25% that uses 25% more fuel to accomplish the same job. The new diesel truck engines get between 4 and 5 mpg while the old truck engines were getting better than 6 mpg. Isn't the pollution the same because the new engines have to use as much more fuel to do the same job as the old even though they reduce pollution?
Storage around here this fall has turned into quite the disaster. With millions upon millions of bushels of 2009 corn still around, most elevators carried over 25-50 percent of the 09 crop. We're less than 25% completed with corn harvest here, and we have corn piles everywhere. One of the local elevators that has 9 sites where they take corn have shut down all purchases. The only corn they are accepting are bushels that were previously contracted. This has really wreaked havoc because now some guys are having to transport several miles just to find a place that will accept their uncontracted bushels. Basis started out at 35 under, and now it is currently standing at 71 under at about the only market taking corn. I'm not sure anyone is surprised by this considering what they did around here during wheat harvest when the basis went from $1.15 at the start of wheat harvest to $1.85 under towards the end of harvest. However, elevators shutting off taking uncontracted bushels is something I don't recall ever seeing in my farming career. To hear endusers tell their story, they claim they are booked up through May. I really don't know how all these elevators got caught with their pants down so bad this year. I'm not sure if they thought they'd have a lot of the wheat gone by now that just hasn't happened or what. The other very strange thing to all of this is the elevators that have many different sites. Rather than move all their 09 corn to one or two sites cleaning the other out, they simply carried 09 corn in every site. Now, they are having to pile new crop corn on top of old crop. It was August of this year before the outside ground piles were picked up around here. I'd be surprised if there still aren't ground piles of corn around here during harvest of next year. The only good thing about their ground piles this year is the condition of the corn being piled compared to last year. Last year, there was a lot of 17-19 moisture corn weighing around 52 pounds piled. This year, the moisture is 13-15 weighing 59-62 pounds.
On farm storage is great, but this marketing scenario is making the decision to keep it on farm difficult. The basis being quoted for this summer is horrible, and there isn't anywhere even remotely close to being normal carry in the markets between the Dec. 10 contract and the July or Sep. 11 contracts. I was fortunate to have converted a lot of my hedges to the cash market here at harvest when basis was more favorable. I call it luck. I'm planning on taking more income this year paying more income tax before the tax cuts expire.