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Veteran Advisor

facts of life for commodity traders

well perhaps its time the commodity traders (wheat in specific) need to be set down and have a

"facts of life " talk..........the talk, if listened to, will provide  valuable information, which if not

taken into use, can change one's life.........................

 

so the facts of life in the wheat trade................

 

well first, let's talk about the "surplus"..........due to lazy and cheap coops and grain companies, rather than invest in

a solid asset, such as a storage structure, they have opted with "bunker storage".

a bunker storage is nothing more than putting the grain on the ground, and throwing a tarp over it.  in the grain science

industry, it is consider a short term storage option......which many problems........

 

in this area......most that have used the bunker option have had problems, from the first several feet being mush.......

then understand that smell, which is a grade modifier, goes throughout the pile......i've also seen the grain come

out in "hunks"..........

 

so........this huge stock.........will be reduced, due to how it was handled.........much of it will be lost........at best

MAYBE feed...

 

now onto "world stocks"..........everyone has a simple idea......oh, plenty of wheat in the world.....but where is

it, and where is it needed.........

 

yes......there might be plenty of wheat in one place, but to get it to others, you must add transportation cost.....

 

you never factored that in do you ?

 

and oh, moving all this wheat around.....not all the places that have wheat, have the level of "food safety" we

 

have here.......have you seen grain that has come from places, after it's been moved and handled several times,

 

has picked up dirt and other things....has been infected with insects........grain protectant that are not permitted

 

use here in the united states........think of that when you are feeding your little kids their chicken nuggets and

 

their little goldfish crackers, or their animal cracker cookies.....while their drool is dripping on their face and

 

you have to wipe it off......do you know where the flour in the breading of the chicken nuggets come from

 

or the flour in the goldfish crackers or animal crackers come from ???

 

what are you going to say to your little ones when they get sick...from tainted flour products ??

 

who is the blame...............look in the mirror........

 

you want to put your child thru that ?

 

think about it

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Veteran Advisor

Re: facts of life for commodity traders

 
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Veteran Advisor

Re: facts of life for commodity traders

present company excluded

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Veteran Advisor

Re: facts of life for commodity traders

Smiley Happy

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Honored Advisor

Re: facts of life for commodity traders

Well, building bins is expensive and storage has costs, if it`s done commercially they want good pay for that risk, if the farmer does it, he or she can do it cheaper but in their own opperation it`s maybe too much to afford, but there`s a potential of a high reward too. 

 

But the coops, "you can`t build a church based on your Easter services"  no matter what a coop does, they`ll be some mad they didn`t get a divended, some mad that the manager snooked the board into building more storage than "what they need"; not everyone will always be happy and when prices are in the toilet the Monday morning quarterbacks come out. 

 

If there`s a burdensome supply, there`s going to be waste and spoilage and wide basis and someone`s going to pay and that`s the low man on the totem pole, the farmer.

 

But the "boys in Chicago" are also the boys and girls in their pajamas in Manhattan and Seattle and they understand about "buying low and selling high" they don`t have anything against us, but they are trading to make money, not running a charitable enterprize...like us farmers   Smiley Happy

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Honored Advisor

Re: facts of life for commodity traders

Elcheapo, 

 

Your talking to the wrong folk...

You are adressing someone in Chicago and seatle and NY   ....... traders or bears or someone investing in futures contracts....

But your talking things that are not their problem.....

Your subject matter is the stuff that usda, congress, and the administration should be concerned with........ instead of being secretary of bribes and payoffs......   All my local fsa rep can talk about is the environment and lobbying to save fsa jobs.  A pile of grain to her is just evidence of farmers doing stupid things and proof of administrative oversight needs among the commoners.

 

Those piles of grain are evidence of a sick economy.  Or at the very least a civilization that is thinking much shorter term than it did 50 years ago.  From the top down, we are working on quick gratification format.  Not long term benefit.

Example... Why would the US with its vast ability to overproduce its own needs with quality grain, buy the garbage damaged flood grain from argentina?  Deteriating infrastructure?  Quick Buck?  China operating within our boarders?  

 

etc.

 

 

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Honored Advisor

Re: facts of life for commodity traders

Elcheapo --------- no one in this environment wants to make long term investment.....   maybe they want to, but won't....

With the amount of regulation written and reconstructed on every whim over the last 30 years ---- and the accelerated creation of regulation......... where would you build a grain facility for long term quality storage,  that would not threaten the view, safety, and shadow psychology of the critters who enhabit the region...

 

We get what we deserve... 

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Veteran Advisor

Re: facts of life for commodity traders

sw basicly you are right.  the whole "system" has changed.  Today, the supply chain has converted over

to "just in time" operations..........so your inventory cost is far lower......everything works fine, untill

the shippment doesn't get there when supposed to.

 

the comment about the make up of the market, is part of the problem........those people trading in their underware.........

 

back when the books on marketing were written, the commericals were far more important, in many respects

set the pace......today, lord only knows what leads the market.

 

while part of the market.......the days of supply and demand giving guidence, is gone.

 

yes, it is telling..........we are told me have more wheat than we know what to do with.........i'm told by the local elevator that they can

not "get rid of" the wheat hey have ((i'd like to have the "get rid of" statement qualified or defined))........yet we are importing poor

quality stuff in......just what are we going to use it for ?  and remember there were shipping cost on top of it !!!

 

it would be interesting to see what that grain (wheat) went and what it was used for.   once that was found out......maybe

the person that purchased it, should be "educated" about the virtues of buying american !

 

there are some days anymore  (and they are occuring more often), i wonder if i'm one of the last sane people on the face of

the earth........i look at the new local regulations, state, then national.......it just boggles the mind anymore, the level if

crazy we are approching.....

 

the other day i had the pleasure (i think that is what it was), to meet and rub shoulders with people in power ((or at least in politics))........from congressmen

on down.......to hear of the way things are being down.........the in and outs of how things "operate" on both the national, state and local level....

just made me shake my head.  i floated a couple of ideas that perhaps make things a bit better......but everyone had the same answer......good idea,

but where are you going the get the money from ???

 

one of the hot topics was education....in my state, 50% of the states income, goes to schools, then plus the local districts also tax you...........

 

somehow, this must be stopped.......if you dare say something bad about the schools.........you are painted a certain color.......you are not

helping the kids, etc.....basicly you are a horrible, terrible person.

 

but people......look at the amount of money that is spent.....with little results.....as all of the reps agreed, education is a "business"......and

they counted up.......there were more lobbist for the education industry at the state capital....than agriculture or oter business groups.

 

from text book companies, to contractors, to bus manufacturing, to even the hotel and restraunt industry.....software and hardware companies,

and upstart groups..and even consultants....

 

what ever happened to education for little george ?  where the teachers cared, and the parents also did.

 

today if little george doesn't learn........it's the school's fult.............hmmmm could it have anything to do with mom and dad ?

 

also the current property tax system was covered......we are going to be looking at lower farm income for a while.......yet property taxes

will go up......seems we are on a 8 year average......and those lower years are dropping, and the last few years are being added.

so it will be a few years untill 2016 values are added, this year we just added 2012.........so the valuation will continue to climb.......

now the wise people on local and staee level are smart......they will make a big deal......no new taxes......we'll just keep the mill

levey the same...so we are hero's...........but since valuation goes up 10 to 20% each year......they get more money......and can say

with an honest face, we didn't raise taxes.........yet our tax bills just got bigger.......and the commodity prices drop

even more.

 

 

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