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Senior Contributor

When will the inverted market change?

At what point will endusers start buying, and producers stop selling the 2011 crop?

 

What prices are you holding out for, or have you already sold the 2011 year?

 

Where are the north corn guy, and the northern iowa permabear telling us what we should be doing now?

 

I wish I had listened to my own post back in the first week of august when I said I was going to hold out for $6 corn and $13 beans since they have been here once, and now are back again as of Friday.  Even if I sell the remaining 20% that I didn't sell for the $4.50 cash mark on corn, and the $11.00 cash on soybeans, I will still not have a very good looking average 2010 price.

 

My hope is for 2011 to offer some hedging opportunities better than what we currently have. I have forward contracted zero bushels for the out years as of today, and still think time is on my side.

 

Is anyone selling the July 2010 contracts, hoping to roll to fall 2011 if and when the inversion changes?

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8 Replies
Veteran Contributor

Re: "On site, on time"

"convenience" is likely what some may get mixed up with "inverted" now.

 

Times changed.  We'll get used to it.

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Senior Contributor

Re: When will the inverted market change?

I have nothing sold right now.  Nothing in the bin is sold and nothing for the out years.

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Senior Contributor

Re: When will the inverted market change?

How did you handle the 2009 crop? Did you hang on to that production past the July 4th normal break or make time, forward contract several years ago, or sell that for $3? Just curious because when I ask the farmers holding a lot of 2010 production how they fared in 2009, they don't say much. I guess if you are consistent, with any method, over time you maybe come out about the same as everyone else.

 

I think the inverted market changes the day or so after I forward contract most of my 2011 production. Once I sell a lot, the market will then realize that 2011 is when the real shortage is going to occur, and really get excited.

 

Murphy's law.

 

 

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Senior Contributor

Re: When will the inverted market change?

You said, "I guess if you are consistent, with any method, over time you maybe come out about the same as everyone else."

 

You put your finger on why 'methods' aren't part of my strategy - ever. Only current information, and the trends they are a part of, can be flexible enough to home in on opportunities and developing circumstances.

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Senior Advisor

Re: When will the inverted market change?

No science to it. I leave that to Mark. I let the math do my deciding. Just a total of on hand inventory and projected inventory and ran the numbers $12 beans and $5 corn. I just didn't like the odds going forward. How much bird in the hand are you willing to risk for the ones in the bush?

 

If I'm wrong, there is always next year and the year after that.  I have no confidence that I did the right thing. It was merely the safe thing for me to do. I know this that is one heck of a pile of money coming in January 2011. Money to use that isn't tied up in the grain bin.

 

This is quite an about face for a guy that historically always thought the prices would go higher. Even when the prospects of that were quite remote. So Old dogs can learn new tricks or at least change his mindset.

 

But then I have been wrong before. At least a time or two.

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Veteran Contributor

Re: When weather allows, load trucks and go, just keep metering

the 010 crop out for cash monthly from now on out.

 

010 is say 40% gone, worked good logistically to sell right off the combines this year, no lines etc.

 

Changing gears some on beans...70% 010 recommended stored, best to move some of that for cash monthly too now..

 

Brazil going to get a decent crop ( AR won't matter if they do or not ).

 

 

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Veteran Contributor

Re: Red, the market did not really start to move till July on the 09,

guys gotta move some sooner or later to MAKE space.

 

I know in the crumby basis areas, was OK to get $3.15 to $3.25 cash for the corn moved in May / June.

 

Granted the $3.35 to $3.50 later was better.

 

Don't know anyone who got close to $4  ( $3.80 and higher ) cash for the 09 corn.

 

Still REAL decent gross returns. 

There was plenty of 220 bu 09 corn ( afer drying ) in areas that yielded closer to the normal 180 to 190 in 010.

 

Keep in mind that 010 corn was combined dry, weighed 58 to 62.

 

The 09 corn, plenty, plenty, plenty of handling expenses, then weighed 49 to 52.

 

Even at $4....one would be better off with the 010 crop at the lower dry yield. 

 

MO. Lack of headaches and additional expenses is worth ALOT.  

 

 

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Senior Contributor

Re: When will the inverted market change?

I think the term 'right' when it comes to marketing is a hard standard - because the standard is different each situation and with the person marketing. Every sale I make is 'right' when I make it. And I don't look back. That's just me. And I worry less than the next guy. At least I'm not sure that I've ever met anyone that worries less than me. I care, but I don't worry. It is a personal trait. I think it's an asset when it come to marketing. I do become more confident and patient when I have my cash flow needs covered.

 

A paradox is that I spend hours reading info and trading info but, I don't have a prescribed method. I could never be an 'adviser'. I'm more conservative with others sales than my own the times I've helped others.

 

I think corn and beans have a chance to have modestly stronger prices in Jan or Feb (the cause would be the argument over inventories and the acre battle if Brazil/Arg is OK), but believe that wheat could have the potential for a larger rise than either in the longer run. Not sure I would call it as much as 50/50 for wheat yet. Weather in the southern Plains is the important pivot point for now.

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