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sw363535
Honored Advisor

marketing plan these days...

of course the market doesn't have feelings ...... "nothing more than feelings"  Heart

 

But somewhere along here, in the rush to reduce expenses, grain gets sold to meet expenses and what's left gets saved because it is a cheap investment and worth more in your portfolio(bins) than currency in someone elses pocket(bank).

 

Because the bottom of the bear slide is a simple marketing strategy, trim costs, trim costs, take a break and trim costs....

 

Is there a point where a grain loan(ccc) becomes part of your marketing plan...???

 

 

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21 Replies
Red Steele
Veteran Advisor

Re: marketing plan these days...

the corn grain loan at 1.35% interest gets me to next summers $4 sales.

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BA Deere
Honored Advisor

Re: marketing plan these days...

Storing grain of any appreciable amount beyond February is not my forté...bad things happen, besides there`s a drawer of unpaid bills  Smiley Happy    But just looking at corn, let`s say we have a 1.5 billion carryover and weather never does give a reason to go up next year.  And if everyone swings for the bleachers on yield, being as their land is already there and that cost is fixed regardless.  A big crop next year could have a 2 billion surplus, then we`d be looking at a 3.5 billion carry and if that came to fruition things could get really ugly.   I don`t know, just pointing out the risks. 

 

But to store grain you`re betting on either weather or Janet Yellan printing money to bail us out.  Make no mistake those trains will be comin` around, but will they arrive at 1:00, 3:00 or 9:00?  IMO the inflation train is already a day late, I might be dead before it ever gets here  Smiley Happy

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OKdon
Senior Contributor

Re: marketing plan these days...

Yes and that interest is deductable unlike borroing money to go to a casino.

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Reno31
Frequent Contributor

Re: marketing plan these days...

I have thought the same thing. I haven"t  used a CCC loan in years but it might fit this years situation. I do think there is a chance for a spring or summer rally. Look at this year, The higher prices only lasted 4 or 5 days but there was a rally non the less.

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sw363535
Honored Advisor

Re: marketing plan these days...

BA,  the inflation train has arrived.     5 years ago.  

 

The comical part is the continued denial..... 

I catch a little flack for painting usda in "clear coat",  or at least pointing out what they do, not what they say...

But since 2008 most government agencies are trying to paint a Rockwell with the best paint money can buy.

 

If the farming inflation hits too close to home, just try to to construct a residential building and pay for it with rental income that the public can afford.

 

We can't even afford to hire ourselves to sort mail.... 

 

Here(my location)-- we are in a more comfortable position(climate and endusers) for storing grain, but I understand and agree with your point....

Problem has to do with those things you point out ----  1.5 billion carryover,  swinging for the bleachers, a big crop next year/ 2 billion surplus, 3.5 billion carry,  -------------- it is all paint......    and it doesn't take that much production to hold the paint job up...as long as there is some carry.

 

The hard fact is that our economic position is so poor that we need that inflation ........ we just gotta keep the public looking the other way...   

Sometimes I get the feeling that commodities are some of the few things we can control the price of.. baring record droughts... like interest rates....  Smiley Happy

BA Deere
Honored Advisor

Re: marketing plan these days...

Well SW, in the casino the "house/USDA"  always wins, they want cheap food and as farmers, their casino is the only game in town. 

 

The last rounds of QE were kept off of mainstreet, banks sat on it and that printed money found it`s way into the Wall Street casino.  But instead of currying the horse, they are going to have to start feeding the horse if they ever want to get any work out of us.  And that means inflation.  I don`t know if it will be this crop of politicians or which crop it will be, but there will be given a choice of 2 options option #1 hyperinflation or #2 a depression.  A economic depression is basically a cigarette a blindfold and the firing squad.  Hyperinflation is enough bottles of booze that everyone drinks themselves to death.  I would think that polticians being egomanics at heart will ultimately choose the booze.

giolucas
Veteran Advisor

Re: marketing plan these days...

Sw,

 

your point about the bottom of the bear slide is a simple marketing strategy and to  trim costs made me think, if we are really at the bottom?  Can we go down .50 Cents, .75 cents or a dollar more on beans?  We could, but I think that we are encountering a great opportunity to position yourself for a longterm trade.    We cannot go down to zero so the downside risk I think is limited.  So if I buy now and the yields do come in this fall how much more will the market price fall?   Who knows maybe this huge production is already priced into the market.  

 

On the contrary, so many farmers have said that the USDA has it all wrong and the true, lower yields will be evident upon harvest.  If that happens the price could shoot up two to three dollars very quickly.  With other factors like, frost,  South American strikes, wars,...etc.  the market price can change quickly and hopefully change your marketing plans too.  

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westernia80
Senior Contributor

Re: marketing plan these days...

Giolucas, do you as a trader believe the USDA, the farmers, or somewhere in the middle about this crop.

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giolucas
Veteran Advisor

Re: marketing plan these days...

WesternIa80,

 

I guess your question is a double-edge sword,  I believe that some farmers will experience record low production because of the excessive rains and I think that the USDA just reports estimates.   Do I think that the USDA modifies and changes numbers to benefit the agency to get their reports out in a timely manner?  I DO.  Do I think that they make errors? I DO.   The  USDA's numbers rarely come out exactly as they originally are forecasted at the beginning of the year.   So having said that I try to listen to all the information, read everyday and get reports from various sources  before I make a trading decision.  

 

My main strength is that I research everyday but I trade a few times a month.  But when I trade I try to look for low risk entries.  I know those three words  "LOW RISK ENTRIES"  are laughable but that is what I try to do.   But to answer your question I listen to everyone but I cannot put all my eggs in one basket just because someone is having a bad day.  

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