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Senior Advisor

But, here's what I'm going to do.

I'm growing my wheat, most planted last fall. Yup, didn't have any idea what I would make on it. And nobody does.

 

And I'm going to sell it when I think I can get the best price I can that will make me a profit. Til then I keep it.

 

I like it simple. And I believe that's a 'solution'. Like it? Or do you have a better one. You can tell me why my solution isn't a good one. Try me. I don't mind. I'll defend my position on the merits. And you can defend yours. I assume you have a solution from your end?

Spoiler
Don't look unless you're ready!
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Senior Contributor

Re: What are traders thinking ?

When will you need the money??
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Veteran Advisor

Re: What are traders thinking ?

I will give the traders credit for coming out
And giving their opionion/view of things.
I think usually in these parts, they may
My be more used to the greeting "get the
Rope boys"

Sometimes we need to have an insight
on how the other half is thinking.

(Even if they are wrong)
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Honored Advisor

Re: What are traders thinking ?

elcheapo thanks ------ it was a good question and I can not tell you what traders are thinking...  With time we see that the commodity trade, like every other segment of the US economy just stands in line at a government office monthly waiting for a handout.  Or at least an opportunity to shake grain loose.

 

Palouser you can keep it simple when you live so close to the export market.  Sitting and waiting has additional costs.

 

I have been away for a few days moving cattle.  Cattle we didn't own or mess with three years ago............ And yes, they are part of my crop marketing plan.  

 

 

Elcheapo ----- A clue to what they are thinking.   The purpose of most marketing programs is to facilitate the transfer of ownership of commodities from the producer to the trader.  That is why most marketing advisors will say your cost of production is not important.  It isn't to them. 

And that is why a marketing plan has to be your plan,  not their plan.

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Veteran Contributor

Re: What are traders thinking ?

Nigel here's one thing that i can tell you about farming and i think it maybe one of few industries that works this way. We sell our produce on whole sale market or discount market and everything we use to grow and produce this crop is done on the retail side of the business. The reason for this we do not control the market for what we sell and we do not control the market we buy to produce these crops. Then we are highly competitive with each other bidding up fix costs of land to farm. Every farmer is looking at cost containment but right now there has been little give by suppliers on inputs and we have been consuming inputs so far that now supplier has seen need to discount to get rid of supplies.

 

I believe most farmers in my area are hoping to raise crop like last year and get price we have been recieving now to have a breakeven year. Also is hope that costs of inputs start coming down with cost of energy prices declining. The cost of fertilizer should be at $250 dollar a ton NH3 based on current natural gas prices not the $650 ton prices were seeing now. Also other fertilizers should

be similar priced this alone would lower our costs for us to near breakeven price with average crop. Also other costs for things should be coming down to with cheaper energy prices but we have seen none of that yeat. If we don;t soon i am afraid gains we have made

in past 5 years are going to be lost and were going to loose number of younger generation of farmers.

 

Palouser was correct that farmers will plant some will change what they are growing or percentage of what there growing but when you add up all numbers things will remain pretty constant. Nigel farming is not like manufacturing or selling services that you can delay or not plant. We have one moment of oppertunity to produce something in a year and if we miss that there is no other source of revenue until next year we have oppertunity to produce again. The change of growing different crops can be done but adds additional risk as well as probably more capitalization to grow these crops. This would be fine if the reward is high enough to take the risk on but what i have done this year i have looked at alternative crops yes margin looks better on paper but only to extent that we could breakeven something i am not going to do take higher risk to just to breakeven. I think i am like most farmers waiting to

see if we see a change in prices or change in costs help out bottom lines out. Were relying on past equity to carry us through until something changes. Nigel business side where you come from would never uderstand the risks farmers take every year we don't know how much were going to produce, the quality of what were going to produce, we have futures market that says what that product will be based on perfect commodity but not what the market is going to discount or reward us for what we produce for that year, and how rest of world produces same commodity and then deal with monetary valuations that too will effect the price of what were producing. Farming is not simple equation of costs and pricing your product to sell and determining your market your selling in. Its much more complicated we have weather, poliitics, world politics, and world financial conditions that can effect our profit in minutes notice. I would say that you need to study agricuture business to undestand how we as farmers operate in it . Its much more complicated than the question you asked above.

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Veteran Advisor

Re: What are traders thinking ?

Elcheapo,

The other side? I'm not against any farmer. I have much respect for the other side but I guess that is just me. You call us wrong, but are we wrong when we take our hard earned money and risk it in hopes of making a return? Do we have to follow your path and have to become farmers in order to trade? Just because we make money buying and selling what you produce does not make us your enemy. You can also use the market to protect your investment and you can make or lose money.

Are you wrong when you did not sell your corn at $4.75 and wanted to make a little bit more and now the desperation sinks in and $3.75 is staring you? Isn't marketing about timing and just like trading or is it my imagination? I'm not going to throw stones. Just remember that farmers did not drive the soybean market up to $18 and corn up to $ 8 and I am almost sure you made a buck or two.
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Honored Advisor

Re: What are traders thinking ?

It probably should be pointed out that farmers ROE the last 10 years

has exceeded Apple

Ken

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Senior Advisor

Re: What are traders thinking ?

Yes that's probably true, but aren't you comparing Apples to Oranges?

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Honored Advisor

Re: What are traders thinking ?

Good one Shaggy!

 

Christ is Risen, Alleluia. Risen Indeed, Alleluia.

Senior Contributor

Re: What are traders thinking ?

Amen Time
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