Did you see what happened with new-crop December corn prices Wednesday? After a nearly 5¢ rise, they closed at $5.67. While that is a long way from the $8 corn from last August, it represents a 2¢ rise above the crop insurance guarantee of $5.65. And that is what you were waiting for to justify your investment in crop insurance. The same faith that you have in burying seed hoping it will grow, has again paid off with your crop insurance decision. So what do you do with that now?...More
Buying crop revenue protection (RP) this year is a no-brainer on the heels of last year’s drought. But RP policies pay best when yields are reduced substantially and not so much when yields are about normal. That’s why marketing ahead is so crucial. Consider this simplified example....More
CSD columnist Ed Usset, University of Minnesota, spoke to farmers at Commodity Classic on March 2. His topic: post-harvest marketing for corn and soybeans. Usset used fictional characters to show different marketing styles and the results from those styles, whether you sell the carry, have no storage, etc. He also talked about sizing up the market. His biggest reminder to attendees, and all crop marketers: Forget last year!
I hate to sound like a broken record, but even after the recent USDA data the lyrics remain the same..."Tight old-crop balance sheets for both corn and soybeans make time-spreads a much more attractive play than flat-price." Improving rainfall and snow coverage is easing concerns regarding the US drought and therefore keeping a lid on US new-crop prices. As each week passes the ability for old-crop tightness to help keep new-crop prices supported may get...More
With early prices for 2013 crops at levels likely above projected breakevens, it may be time to get a few bushels booked, says Ed Usset, University of Minnesota grain marketing economist. Usset recently established his annual preharvest corn and soybean marketing plans. While he believes futures contracts normally provide more marketing alternatives to growers, he doesn’t discard cash contracts in his early marketing plans....More
USDA has lowered the projected high-end season-average farm price for corn down to $6.75-7.45/bu. It’s a 20¢/bu. drop from last month – a trend farmers hope doesn’t continue as planting time nears. The projection came in Friday’s World Agricultural Supply and Demand Estimates (WASDE) report, which also showed tight ending stocks unchanged at 632 million bushels....More
CSD columnist Ed Usset, University of Minnesota, spoke to farmers at Commodity Classic on March 2. His topic: post-harvest marketing. Usset used fictional characters to show different marketing styles and the results from those styles, whether you sell the carry, have no storage, etc.
While locking down revenue crop insurance may be top of mind, farmers also should look hard at marketing 25-30% of their soybeans before planting, says Chris Hurt, Purdue University Extension economist and grain marketing specialist. The $12.87/bu. insurance floor for soybeans was determined by the February Chicago Board of Trade November 2013 soybean futures contract price....More
I am cutting straight to the facts today. We have a couple big reports coming up, and I wanted to throw my hat in the ring and call a few shots to help you get in the game and better your operation....More
Old-crop grain prices have tread water for months. Many traders believe that a market that cannot establish a clear uptrend is a market poised for a setback. I don’t agree. Old-crop corn and soybeans prices will hold steady and trade higher in the next few months. I read the same bearish news that you do. Let’s walk through the problems....More
With new-crop corn and soybean futures markets priced for profit, farmer Rod Pierce takes full advantage of revenue crop insurance. He makes substantial grain sales in addition to guaranteeing income on 75-85% of his production....More
In two years or possibly even in six months, many corn producers will recognize that $7.50 corn may well have been the worst thing that has happened to them in the last 10 years. I’ve said before that I am of very strong opinion that corn prices are in the midst of the biggest bear market in history. I am sure some readers have laughed at such a statement and others have thought I have lost my mind. I am convinced that $7.50 corn is actually going to be one of the worst things that has happened to a Midwest corn farmer in a long time....More
New-crop corn balance sheet numbers continue to paint a vividly bearish picture and the bulls are getting more and more concerned. Several analysts, banks and traders are throwing their hats in the ring in regard to new crop corn balance sheet estimates. The bottom-line is that even an average crop is going to produce a huge carry, and ultimately weigh on prices. Those not wanting to price any new-crop bushels are essentially betting on another catastrophic growing season....More
From my perspective the pros are desperately trying to skate to where they believe the "puck" is going to be, NOT to where the puck is currently! If you want to compete in today's markets you have to take a similar approach; know the rules and understand how the game is being played! From a producer's perspective I am still not comfortable re-owning any previous sales....More
South America is going to throw up huge numbers, there is no argument or debate, but they also might use a little more. Regardless of the weather from here on out, they are almost certain to produce an additional 30 million metric tons (maybe even more) of soybeans compared to last year. We may also see new record corn production as well. CONAB is thinking 5 mmt more corn than the current USDA estimate and 3 mmt more than last years record corn crop. This may be a little optimistic....More
Unless you've been under a rock, you've likely seen - or at the very least, heard about - the Dodge Ram advertisement heralding farmers during Sunday night's Super Bowl.
It featured a powerful and nostalgic reading of the poem, "So God Made a Farmer," as delivered by Paul Harvey to the 1978 FFA Convention....More
No one has any accurate bets or lines on the weather this far out. Therefore if the USDA comes out with big acreage numbers for 2013 the bears will say, "I told you so." On the flip side if the USDA comes out with numbers below trade expectations the bears will say, "the USDA is playing it conservative, just like they did last year..." Either way I don't like the set-up and suggest...More
For farmers who got sucked into questionable multi-year corn and soybean marketing in the mid-1990s, talk of the 2013 fiscal cliff would be just a speed bump. Not only were there massive losses, some wound up with heavy fines and even jail time. Unsecured hedge-to-arrive (HTA) contracts mismanaged by elevators, market analysts and farmers caused the stench....More