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Honored Advisor

Re: Well Buckle up..... the big hills are just ahead.---Futures

We do have a massive support under most farmer led commodities, called the loan rate, and we are getting below it in some areas for some commodities. Get nearby corn close to $3 and it kicks in big time.  

Time show me your cash flow with "loan rate" pricing?   Better yet show me a coop that survives that thought.

Like it or not SW, the markets are working, corn is worth about $2.50 to make fuel, yet some idiot is still willling to pay $3.20 locally tonight.    False --when the ethanol won't take it, makes no difference what the ethanol bid is.   When they are telling the feeders no more ddg's or wdg's, --- They are not asking feeders what they will pay ---- they haven't got any where to go with the ethanol.

We have some good friends who run a local hotel franchise....there is a business with no floors. Ag is incredibly stable and we on this site should at least appreciate it. jmo  Same applies...... a loan rate is viable only if it is set at a survival rate.  It's existance is not market support unless it can be used to survive financially.  Like telling GM the government will buy every car they produce for $3,500 and expecting them to keep producing for a cost of $6,000.  That is called a congressional shill---- vote getting speech material..... Look what we do for you

$4 cz puts were cheap even last week. Corn has never had a down year in terms of demand in the modern era. That was because it was never a fuel. Now it is a fuel, so demand can easily be down a bil or 2 bil bu, the implications for price of a 4bil carryout are pretty clear. Thankfully, we have the PLC/ins floors, plus another MFP, etc.

Here I agree,  IMO we have barely been able to meet demand...... There is a shortage of corn in the feedlot region now due to the continued depletion of irrigation in sw ks.... both natural and bureaucratic.  The demand load is probably at a peak historically with all the pork and dairy expansion added to the beef plant supply--even if we feed less beef than we once did.  But we live with another illusion--USDA............   So if ethanol plants shutter, then Iowa can actually export some corn down to this area again as in the old days--------- short story.   Federal interference in ag markets and stimulus to keep producing (along with fake reporting) create massive problems.

Now the livestock guys are really getting screwed though, no meat in the case, extra hours on the kill lines, and pork and beef are down 30%. Someone is getting gouged, it is just not the consumer.   Really,  or do they know what their product is worth??  Grain producers need to make the adjustments and are not allowed to.... I would bet beef producers will have a better year financially.  Grain producers will have a guaranteed loss and a welfare check that won't cover the wounds.

 

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