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BA Deere
Honored Advisor

"The signal" Mark Gold, Market to Market

There`s a "signal" for a bull market in grains, usually weather that foreshadows a buck run up in corn and a 4 buck run up in beans.   Mark Gold has only told me and a few others (no, he hasn`t told me Smiley Happy  )  but, I`ve been racking my brain as to what that sign might be.  If we don`t get it the rally will fizzle.  I`m guessing it has to do with the cosine of Theta divided by number of days when last 1" rain occurred in June at the Des Moines airport.  Smiley Happy 

Any way, click to Mark at 8 minutes and if anyone really knows the signal, share what your idea might be.

https://www.youtube.com/watch?v=1jfyv08guVY

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15 Replies
Hobbyfarmer
Honored Advisor

Re: "The signal" Mark Gold, Market to Market

5% ownership of the commodity by the producer.

Magic trigger is usually 15%.

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BA Deere
Honored Advisor

Re: "The signal" Mark Gold, Market to Market

Hobbyfarmer, I think your "grow, bin & sell" strategy is a is one of those wealth building secrets that`s hidden in plain sight.   I`m not a fan of storing grain, because even the Chinese would say I suck at it, I heard a guru a few years ago describe grain bins as "monuments to indecision" that fed my narrative.  Though I do store a little to dribble out for cashflow purposes, I`m finding that the "beer money grain sales" is more than carrying it`s weight this year (doesn`t always turn out this way).

I sold some beer money corn, (though I don`t drink) for about $6 and bragged to my friend "Binless Barry" that I hadn`t sold corn for that in probably 8 yrs and I went on to boast I sold a small amount of $8 corn in those years.  He stated he`s never sold corn anywhere near those prices, because he`s always contracted and dealing in "new crop", that old crop ownership is where the wealth is built. 

Yes, I hear gurus on USFR saying farmers are 85% sold and as of now, those with old crop ownership now will sell those bushels two for one as Binless Barry.  

rickgthf
Senior Advisor

Re: Corn is $6.50, if ....

Corn is $6.50, if there is a bull market signal, we've already missed it.

If you look at historical corn prices and compare them with recollections of events (drought, etc.) you'll be hard-pressed to correlate events with price moves until after the fact.  My strategy is to sell what corn  I need to sell at the higher end of the range and keep selling some on the way up but always keep some corn available to sell and hope the average is above average.

  I'll leave the home runs to those who know more than I do.

corn-prices-historical-chart-data-2021-04-25-macrotrends.png
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Hobbyfarmer
Honored Advisor

Re: "The signal" Mark Gold, Market to Market

Bins are a two edged sword.

Almost 25 years ago my life and farming career went through a total overhaul.

I became in great need/requirement to find a totally new source of funding.

Got on the phone and called every bank I'd consider doing business with (8) in the area.

The one the most people had recommended asked me three questions...

My name

My location.

Do you have bins?

After that last question was answered with a yes, he said NO.

We don't do business with farmers with bins.

Last late summer was not a shining example of profitability of bin ownership.

They are just a tool or maybe should be thought of as just another piece of farm machinery.

They are a tool that I use to expedite harvest.

They are a tool that has helped even out taxes.

They are a tool that helps even out the work load.

They are a tool that if I figure out the markets and don't have that indecision troll bite me, will help me hit one outta the ballpark this year.

Yes they take management and oversight.

They are one of the profit centers of my little farm.

Started planting corn today, one small try the planter out field done.

Late lunch done , back to planting...

You all have a safe day out there...

 

 

 

BA Deere
Honored Advisor

Re: "The signal" Mark Gold, Market to Market

The market seldom even offers the opportunity for a "homerun", unless you`re lucky and have deep pockets ie, (crop in the bin, crop in the field and crop in the bank) at best only a small fraction of your crop will be eligible for a homerun.  The grain merchandiser  chicks on Twitter are telling stories of "a guy knows a guy who still has all his 2020 crop" like if that`s a unicorn or something.   I wouldn`t doubt it, when prices are low there`s talk of guys with 3 year old corn, I know they`re afraid of taxes, I`d sell and pay the tax, it`s only getting higher from here on. 

How much higher can $6.50 go?  I don`t know, but I doubt any of us thought we`d see $75 or $100 sheet plywood either.  Everybody`s pretty much done planting corn, some beans done, so don`t be surprised if corn goes down a little next week.  Then Eric Snodgrass comes with a forecast and off to the races again. If I was a enduser I`d be buying the dips.

rsbs
Veteran Advisor

Re: "The signal" Mark Gold, Market to Market

How high can corn go? What is a comparable price for the 1995 corn I sold for $5 with the inflated values when we are dealing with a dollar worth what....25 cents of what it was worth then? $20 per bushel?

I remember buying a five year old 1680 combine with just over a thousand hours on it for $65000 with the bean head, and paid cash for it with the 15000 bushels of corn I had left to sell that summer. That was like a lottery win for me.

BA Deere
Honored Advisor

Re: "The signal" Mark Gold, Market to Market

I wonder how much of this "weather rally" is really about inflation?   Oh it`s dry, no question, but if you step away from the trees to see the forest the world is changing.  CFAP and 1st & 2nd draws of the PPP forgivable loans, "they" know that no one spends money like farmers.   In the QE process a few years ago, they kept the created money in the banks and stock market, this time the money is making it to mainstreet.  Whether it`s "enough" will be debatable.

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rsbs
Veteran Advisor

Re: "The signal" Mark Gold, Market to Market

another sign of inflation is the vehicle market, both new and used.

Try finding a five year old vehicle with less than 60,000 miles on it, and report back on the price.

Also, let me know about "deals" on new trucks.

 

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Hobbyfarmer
Honored Advisor

Re: "The signal" Mark Gold, Market to Market

Is corn the new gamestop?

On fire last half hr.

Six and three-quarters cash here

Can it hold or improve in the regular session or fade as it has in several Monday's after a good overnight?

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