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jennys_mn
Veteran Advisor

What Happens?

What happens when we sell grain as a farmer and we get a bad crop?  We get to pony up, right?

 

What happens when we sell grain at these discount prices around the world, especially in light of what our dollar is doing, and these marketers don't get the grain that they are expecting to fill those contracts and boats waiting in the Gulf?  As the owners of the grain right now, we still have the upper hand.  Bin, lock, go on vacation and let the boats rust in the gulf for a bit.

 

Jen

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18 Replies
jennys_mn
Veteran Advisor

Re: What Happens?

And maybe - we should "reward the market" today.  Bin - Lock, go on vacation....

 

Jen

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ECIN
Senior Advisor

Re: What Happens?

What happens ? Well after you lock you bins - then next spring you will probably sell your corn for ? what ? 2.75 after we flood the markets with our corn here - Smiley Surprised

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dairyfarmmn
Senior Contributor

Re: What Happens?

Exactly ECIN!!!! The market knows that corn has to come to town at some point. And they can wait longer than the farmer can, been proven many times!
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pritchh
Senior Contributor

Re: What Happens?

1 may not be discount.

2 the $ can do anything from here

3 we are not at trendline, below trend already reflects the poorer N IA an MI crops.

 

fwiw

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jec22
Veteran Advisor

Re: What Happens?

Pritch, while I don't see a lot of price movement anywhere but down, did I understand you are saying this crop is already below trend?

 

2006  149.10 bpa national yield,  2007   150.7  2008  153.9  2009 164.7   2010 152.8   2011 147.2  2012  123.4   2013  estim 155.3

 

 

HOW IS 155.3 BELOW TREND?  That is the second highest national yield in 7 years.   7 YEAR AVERAGE IS 148   WE  are 7 BUSHELS ABOVE THAT.   I guess it depends where you start your trend line.  (With all those 7's maybe that is a sign...7 dollar corn..LOL)

 

So you must have be talking production, not yield.  Which the USDA has at a record. 

jennys_mn
Veteran Advisor

Re: What Happens?

ECIN, Dairyfarm Man, I know. I'm speaking mainly from the soy side of things. But I have to agree, those that want our product have us over a barrel. If they don't get the product, they shutter the doors. But doesn't that in and of itself send shudders through you? It does me. It says to me we have a free market - "with conditions". A free market "with conditions" is not a free market in my book - it is a controlled market, and a controlled market is one open to manipulation. Which "I" think is where we're at.

Jen
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ECIN
Senior Advisor

Re: What Happens?

Here's the real deal - for me anyway - I have already screwed the pooch here - I didn't sell anything at 6.16 or so for jan/14 last yer - but why do that ?  I don't have  clue what the weather will do or anything else - and after the last few years - just bin it and then sell it - made millions and millions doing that - lol  Then comes this spring and we all know ho that worked out - but still no rally to speak of - and i don't think there will be either - evn if harverested acres drop to what ? lets just say 84 mil. at 150 - well heck thats still 12.6 bil. And raise that to --say 155 - that comes out to 13 bil of corn - see theres no way out of this , this time - the American corn farmer has screwed themselfs again , with a lot of help from the Gov and there dam crop insurance forthe fringe acres ! That is total BS to me - theres your food price control - just wonder why they don't do that to Big oil ?

 

As far as Shutters ? heck no it don't - This is not my first rodeo - rode some - got thrown some - BTW that reminds me of this one gal I knew - OH maybe I better not tell that one - lol

 

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sw363535
Honored Advisor

Re: What Happens?

Not sure that is true these days and being able to wait longer than the farmer is just a marketing statement,  a "tool" in the procurement of grain.

-----------------

A month ago from RayJ----- 2 quotes

 

"but I can tell of two gents within 25 miles of this plant still holding 150,000+ apiece......and fully prepared to eat the entire inverse and start over again because we won't pay them $7......"

 

"in 2013 carryout is .719, but supplies are not evenly dispersed and appears harvest will be 2-3 weeks late"

----------------

The carry was actually 0.661 --- no wait, that is the final ESTIMATE from usda's S & D report.  --- another "tool" of procurement ------therefore those who buy grain quote it as fact.

 

IMO three things have changed your statement.  1. More and more grain is being produced by fewer and fewer entities.----- Stronger financial hands own the grain---thats right own and they will decide what crop year it will become available in.    2. The grain purchasing industry has changed.  They are now more into "processing" and manufacturing and much less into export and storage ---more difficult to wait for grain.    3. Interest rates make holding grain easier and more profitable-------- and as long as Uncle Sam needs monthly cash transfusions I don't see that changing.  The economic realities now are slowing commerce in many ways and as long as grain looks more valuable than the US dollar, delayed sales will be popular. 

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rayjenkins
Veteran Advisor

Re: What Happens?

Hey, guess what fellas...

 

those two gents I talked about "went down with the ship"

 

called them the last time they could sell +120Z and they both gave me the bird

 

and don't give those tired old arguments about taxes, bad crop,  being bullish.......they could have set the basis and been long the board or written deferred income contracts to 14 or 15.......and preserved the +120Z basis

 

I am seeing things this year far, far different than what I have in the previous 22 years in this business....

 

 

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