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Esteemed Advisor

Re: its not the first grain rodeo!

I get the frustration and I certainly get the fact the NASS data is becoming less and less accurate/reliable.

 

They didn't really find 236 mil bu, they just said they found it, last month they said something else,

next month they will say something else...............not much accountability for them.

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Senior Contributor

Re: its not the first grain rodeo!

the markets are acting as if its gospel truth.

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Honored Advisor

Re: its not the first grain rodeo!

Just my Jethro Bodine ciphering, but it seems that in the case of corn, the carryover pushed, pulled and dragged close to or over 2 billion bushel, that is a cushion that keeps grain flowing in the pipeline.   Someone somewhere has a bill coming due and has to move corn, if carryover gets closer to 1 billion bushel, then there are enough with deep pockets that they can wait a month safely before marketing. 

 

All the "reports" have to do to keep the cheap food policy intact is find enough bushels to be bumping against the 2 billion carryover mark and growers give up hope easily and "just dump it! Bleep it!" .   But who can really tell me within 500 million bushel of what the carryover is? 

 

Kind of like OJ trying on a blood shrunken glove that "doesn`t fit" he`ll spread his fingers and everything so it won`t fit..."so looks like I`m innocent!" ...or in the case of corn "Looks like there`s a burdensome supply...we`ll have to knock 50 cents off what we`re offering, sucks to be you".

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Veteran Advisor

Re: its not the first grain rodeo!

I thought there were quite a few less cattle to eat grain due to death losses in the West?

Bob Wisner once commented that if every Chinese corn farmer missed reporting 1 bushel of corn the result was a 300,000,000 bushel difference in corn stocks.

Well, we don't have that many farmers, but it would be interesting with all the increased on-farm storage how good an idea we have of farmer holdings.  We might have a clue to the priced bushels but the unpriced could be rather hard to pin down.

 

Of course, the bottom line of all of this is how are we marketing this?  I have no old crop grain and I have sell orders out but no new crop grain sold (and of course I have no crop insurance as I'm not in the Farm Bill).  I guess my current year crop is part of the great unknown.

 

Anyway, all of us have to get rid of it sooner or later, so the question is what's the plan and even more important, what's the action?

 

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Contributor

Re: its not the first grain rodeo!

Question:  Does the world supply matter at all if President Trump gets what he wants?

 

I realize the trade deal is not easily resolved.  It's a big if.  But it's not as if the man doesn't realize what needs to happen for re-election.  He needs to bring in the bacon, and it's high time that happen with the Chinese.  But how painful it is in the interim to try and get there.  

 

It is very clear that the administration's goal is trillions more in purchases from the United States.  A lofty goal?  I don't know.  I assume the Chinese can only come close to that amount through Ag buys.  I also notably read on Bloomberg that Trump wants the Ag purchases "front loaded" right up to 2020.  It's not as if the man doesn't know what pushes up price.  There is at least a case that can be made for "bigly" price movement.  It seems we may soon find out whether having a new sheriff in town has done anything substantial.  

 

What if Trump says: Give me $12 beans by the next election?  Could the Chinese do that?  I bet they could, by simply buying until the target price is hit.  Warren Buffet says "a public opinion poll is no substitute for thought"  And right now, isn't the overwhelming opinion is that global stocks are a huge problem?  Is this really true?  Is it still true in a world where Trump is pushing for bi-lateral talks?  It doesn't seem he cares at all about global stocks, but rather he's concerned that the Chinese take care of our stocks.  I believe this is how it was done in the old days of bilateral pacts between trading partners, and we've gotten away from it it modern time--which worked fine when corn was in shorter supply.  Now it works pretty poorly in the near term at least.

 

Why is Trump pushing for bi-lateral talks as opposed to "one size fits all" trade?  It must be because he feels the Chinese owe us their business as we have LAVISHED U.S. dollars in their direction for decades.  Buffet says we should think things through for ourselves.  Doesn't this mean that the trade talks are a wildcard not seen in recent memory and that during the next election, Trump will either be lavishly subsidizing farmers with all his new-found tariff revenue (if everyone walks away) or soybeans are above $10?  Maybe $12?  

 

I do think it's true that we've been very good to the Chinese, and that the case can be made that it's in their interest to reward us back.  Hopefully very soon.  

 

Maybe this is a situation where global stocks don't matter so much?  I admit one has to scour the internet for a bullish story, but I do believe these to be the administration's goals.  It seems to be a real possibility.  

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Senior Contributor

Re: its not the first grain rodeo!

Being good to the chinese by buying their stuff?? I think it was our corporations exploiting their cheap labor to make cheap goods for the US consumer to buy. aka walmart,costco apple etc.
It does seem ironic that we cry foul when the balance of trade is hugely in their favor! As aproducer of a product they wanted and paid for which helped cut the very trade imbalance they were bitching about im very disappointed!
as ive said in previous posts agriculture is but a sacrificial lamb. The trade deficit is the worst its ever been! We as producers need to find alternatives for our products.
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Advisor

Re: its not the first grain rodeo!

Perhaps it's outfits like China that have served as an off shore tax and cash laundering haven for USA mega corps.

 

face it there's USA corps that have 100 to $200 billion in offshore cash reserves that Admit they cannot bring into the USA due to tax reasons.

interestingly, by law offshore income is supposed to be reported, then taxed.

but the Big Cos seem to get away with doing things as they feel is right.

 

I do tend to agree with the Big Corps re this issue btw.

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Honored Advisor

Re: its not the first grain rodeo!

When it`s said "we put tariffs on, but the trade deficit went up!!"  that`s a perfect example of pushing a narrative with incomplete facts.  My questions are (which are never addressed in those stories) are : Did we buy more from China or did China buy less from us because of their tariffs they`ve placed on our soybeans?   Soybeans are one of the few products they buy from us, so if they tariff them and they buy less of course it will raise the trade deficit assuming we keep buying Harbor Freight tools and Walmart junk.  

 

Also, the revenue that tariffs generated are never touted, there`s a political party that loves to raise taxes....well, if the $1 pair of pliers goes to $2 as opposed to the $10 American made pair of pliers, good!  If someone is treasonous enough to buy $1 pairs of pliers, soak `em good with a tariff/tax.   The buyer has 3 choices 1.buy the cheap piece of junk pliers that`s got a tariff   2. buy the American best quality pliers and put someone`s brother in law to work   3. go without a pair of pliers.    It`s not like property taxes, where the county sends you a tax bill and it has no bearing on the price that you sell your grain of the yield you got.   It`s a bill that you pay or they attach interest and miss too many of them, they auction off your farm on the courthouse steps.

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Senior Contributor

Re: its not the first grain rodeo!

dont think i said it right about tariffs. China put tariffs on our soys. What bothers me is when the President put tariffs on their products there were quite a few corporations that were granted exemptions. Also at the beginning of March he threatened them with another $250 billion of tariffs if there was no deal. well that deadline came and went with no comprehensive agreement. In my opinion he should have followed thru to hurt them bad enough to come an agreement. This is an eerily similar situation when the north vietnamese would argue about the size and shape of the negotiating table to the extent that nixon bombed the hell out of hanoi. then they came to their senses. some times playing hardball is the only way