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Honored Advisor

basis vs corn/bean ratio

the corn and bean ratio.   new crop now is 2.6.............. average  not necessarily high even though you can get 10.26 new crop beans....... But new crop corn is at 3.95.....

 

We are seeing a shift to beans locally on several acres..... not huge but several.....  (not so much because 10.26 is a great price) because there is a profit potential there.  

Basis(-80) is poor for beans but historically has improved into summer.

 

Corn basis is more extreme here.... at -45 cents it is in a place we haven't seen on the ksu data base in any year( about 18 years of history).... I cant remember it being this low.since 1973.........that's the limit of my memory on corn,,,,,,,, but the memory is weak...

And the costs on producing corn are extremely high..... especially in sw corn boer, spider mite, water pumping country.  Not improving much especially as fuel rises... this may be local...........

 

do these two farcors (basis and corn/bean ratio) determine acres planted?  or are economics of losses per acre over riding the choice and driving up bean acres in spite of the c/B ratio?

 

What will the dakotas do?

 

 

Any thoughts on this subject......  In preparing for a bad year

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4 Replies
Honored Advisor

Re: basis vs corn/bean ratio

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Doesn't this tell us that we just do not need corn acres from the fringe??

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Veteran Advisor

Re: basis vs corn/bean ratio

You're right, SW.  It means it's time to cut way back on crop insurance subsidies so the fringe acres aren't tempted to plant for the insurance check.

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Honored Advisor

Re: basis vs corn/bean ratio

Great thought Jim.............

 

I haven't even tried to mentally consider crop insurance vs basis...... 

But then again there are usda formula's involved....and I am afraid there might be that "big negative basis is good for your insurance coverage" outcome that just makes you want to steam.

More likely no good news at all.  a guaranteed loss and a win for the agent.

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Honored Advisor

Re: basis vs corn/bean ratio

Jim    truth is  --  IMO  the crop insurance on the fringe is such poor coverage it doesn't figure into the decision.

 

So I seldom consider it in a planting decision.  

 

Although south of us there is rumor that corn is loosing acres to cotton because cotton price is supported better than our 1970 corn and bean Loan rates.

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