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sw363535
Honored Advisor

bean market

The soybean market sure seems strong.  On a correction day it didn't back off much and coming back tonite.  On top of that there doesn't seem to be much complaining at this level-----locally or at the export level.  What level is too high?  And if Brazil is going to plant beans wall to wall, corn is going to be sucking air for a long time??

Our feeder is telling us corn is too high to feed, but it is not their biggest problem.  The drought is continuing to dwindle cattle numbers reducing placements.  If that is right, what happens when it starts raining?  Won't the heifer #s disappear for several months as Ranchers try to rebuild??  We been shrinking the herd for several years in one location or another.

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7 Replies
COrnguy
Contributor

Re: bean market

I agree 100%. The soy action, even the setbacks have been somewhat "textbook" fot the next leg up. Exciting times, something we'll tell our grandkid trader someday. Personally, I think it'll be a "flash in the pan" runup to the low $20 area, then back off to the $17s.

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SideHill3X
Frequent Contributor

Re: bean market

I agree as well........... It seems like end users are not cutting back, and if the corn is indeed not here, and the function of the market is to get the price high enough to assure an adequate carry out of both beans and corn 9/1/2013; then the market has not done its job as of now. It seems like $10 corn and $20 beans will be a likely reality. We are a farmer feeder of cattle and those margins are still there to return current local marketprices for grain, (typically 40-80 cents over) with the ability to contract feed cattle with a packer when feeders are purchased at a positive basis to futures. As long as that margin can be protected when placing feeder cattle I will feed cattle. I do not need to purchase any feed for the cattle other than minerals and NPN. Family members employed by local feed mills indicate many have price protection in place and are still going to feed livestock. Dairy seems to be a the greatest risk as of now. Cattle being marketed by us in September are already on the books at over $1.30 live. That sleeps well at night!!!

Safe harvest to all.

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sw363535
Honored Advisor

Re: bean market

SideHill3X,

 

Thanks,

Our guy was similar.  The corn price was a comment of his personal opinion but he said if he could acquire calves, they could still be hedged.  Do you agree with his assessment on cattle numbers?

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SideHill3X
Frequent Contributor

Re: bean market

Our location gives us a 500 mile discount in sourcing feeders. The main feedlot area of the country are going to have a 500+ mile haul to out bid me at the feeder sales and he is going to have to buy corn, that I do not have to purchase. Also my longest harvest haul for any of my crops from the combine or forage harvester is 2 miles. Most goes less than 1/2 mile to storage. The wild card for me is all the silage harvested in the normal grain areas of the corn belt. What is going to happen to that silage? If insured as grain the grain loss is covered by crop insurance and the silage is essentially 'free'. If the owners of this silage now look for a marketing plan for the silage and decide to buy feeder calves to background, they may 'buy high and sell low'. Discipline will be essential in these endeavors. Hauling silage to dairy farms that may need it and can not afford it or pay for it, could make 'free' silage costly.

There are a number of 'fire sale' animals out there currently. Dairy heifers have a limited demand currently. Will they go to feedlot for finish?. Slaughter options for finished Holstein is more limited than it used to be for me. Calves are a bigger stretch for me currently than heavier 8 weight cattle, and I can still price on the April futures.

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sw363535
Honored Advisor

Re: bean market

sounds like you have good "tough times" options.

 

you spur a thought---------It used to be hard to find a home for the dairy "feeders", I drove by a 40,000+ lot the other day and it is still nearly full of holsteins.  Been that way for a year and may be the same calves----  Smiley Happy   Just looks odd to me, but I am sure it probably works on paper or they wouldn't be doing it.

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SideHill3X
Frequent Contributor

Re: bean market

There are several packing plants that 'specialize' in Holsteins throughout the country. I believe several are part of JBS. If I was near them, I would likely be feeding Holsteins. But 800+ miles (versus 80) to slaughter is not a trip for a Holstein to make, IMO. Your story would be consistent with what I have heard about JBS having a large Holstein lot somewhere near one of their plants.

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sw363535
Honored Advisor

Re: bean market

Thank you I will research this more
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