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Advisor

deer in the headlights

When beans shot up after the report the market went back to where I'd laid out that I would sell another 20% cash and either take the loss on a corresponding put or keep it a while for speculative purposes.

 

It was so violent and unexpected that I froze.

 

So bean position, cash and options is just now in the money, corn decidedly so. Could be worse.

 

A little early to be taking a victory lap although in corn at least probably see the green flag.

 

Way early on this but my concern now turns to next year- the hoped for paring of stocks that might have produced a couple years' more of decent pricing opportunities doesn't appear to have happened.

 

I've known guys who would regularly go ahead and get 10-20% of the next crop on the books if there was a modest rally and a carry structure in the market as there is to CZ17. I just didn't have that level of confidence and wuite honestly, the last thing on my mind.

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Honored Advisor

Re: deer in the headlights

Sell, Mortimer, sell!

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Advisor

Re: deer in the headlights

Plan and execution seem to have worked out OK.

 

Neither "sell" or "don't sell" are dirty words.

 

Nor in my view is "options" even if that appeared to be the consensus here.

 

If anybody knocked the market dead with large straight sales near the highs then I congratulate them.* I was never anywhere near that certain of anything, just feeling my way along in the dark.

 

I'm going to retreat from this conversation for a while, I've gotten too wrapped up in it. And I doubt that it served much public purpose anyway.

 

*goes without saying about reporting sales retroactively. One of the coffe table guys always sold the highs after the fact. I guess he went bankrupt for some other reason.

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Frequent Contributor

Re: deer in the headlights

Well I'm sure corn acres will be up next year again.

 

People seem to love to plant more corn at these prices.

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Advisor

Re: deer in the headlights

Mar 1 number surprised me as did the June 1 (although as I said, I was worried about more total planted acres, just thought they'd be beans).

 

But as I also wrote it was what seed people were telling me here- where there was ample time to switch and $150/acre incentive to do so by that time. Said there just weren't many returns at all although some people were probably about a week away from it.

 

So, if this crop continues to come home I just hope that guys who apparently planted corn seeking the upside yield get it. $3+ on 220 probably isn't a disaster for most.

 

But it is a longer term problem if we come in with a 2.5bb carryout.

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Veteran Advisor

Re: deer in the headlights

I know a guy like that too...been bankrupt in some shape or form three times and always sells his

crop at the highs. Has an uncanny ability to always buy inputs, like diesel , right at the bottom too.

 

Funny how that works. Must be his wife and kids spending money like drunken sailors.

 

Well, I didn't hit any home runs on this rally, but I did what I said the plan should be in my post a few

months ago on how to survive....I closed out 2015 production, and about half of2016 is contracted

for $4 corn and $10 soybeans.

 

Thats what my cost structure is to pay the bills and have a small profit and stay in business. THe guys

that needed $5 and $12 are going to have to settle for$3 and $10, which may not do the job. 

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