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Veteran Contributor

Unsold inventory

Very attractive cash bids, nothing planted, how long should a guy set on his hands?

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4 Replies
Frequent Contributor

Re: Unsold inventory

Depends on what the forecast is.  Ours say rain rain and more rain!  I hadn’t sold any new crop and thankful I never after losing all of it in the flood.  If you don’t have anything planted you better have an exit plan to escape the contract

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Veteran Contributor

Re: Unsold inventory

I agree, more rain coming here also, thankfully no new crop contracted

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Frequent Contributor

Re: Unsold inventory

Well, from the looks of last week's Commitment of Traders report, where producers sold more than 108,000 contracts, or 540 million bushel, somebody already did sell.

  However, like you say, nothing planted, so what's the hurry?  Farmers are famous for selling too soon. 

  The fact is,  even if this week's planting progress report show substantial progress, much of what was previously planted is in poor shape and that what  was just recently planted has reduced yield potential.  So, sooner or later the market will come to realize there isn't going to be that much corn out there.

  Given that I've got corn in the bins to sell, that's what I'm hoping anyhow.

  

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Frequent Contributor

Re: Unsold inventory

I went through things with my insurance agent Friday.  I have half my corn planted, but nearly got stuck Friday morning trying to start working up my "driest" bean field for planting.  I took 75% coverage, and bought up the extra 5% PP coverage on corn only. My APH's are pretty good except on one rented piece where I inherited yield history from a guy who hadn't heard of that new-fangled crop thing called "fertilizer". 

I was a bit surprised to find that, where my APH's are good (all but one piece), my insurance payment is within $10 of the net profit I hoped to make from the crop! I did get that newest piece planted to corn since I had tiled that part of the field, and will plant beans on the other half as long as I can get them in before the end of June. But where I have good APH's, I will not do anything that is not agronomically sound (insurance buzzword) to try to get the crop in. I'll take the insurance (never had a PP claim before) and do my part to reduce the carry-out. 

I'd encourage everyone with too-wet fields to look at the "risk-free margins" you'd get from PP, and compare it to what you might make planting into soggy soils and poor markets, MFP notwithstanding. "Bird in the hand", you know.

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