Land Bubble? How About a Farm Bubble!

[MoBuckChaser]

Here are cash grain bids for our farm in Missouri. New Crop corn is now under $3 Someone should post this on the Dark side for the Idiot CFO in Nebraska that said Corn will never go under $4. What a clown, and a CFO Clown at that! Hahahahaha! I tried to tell them guys to get there Puts bought, but people just don't like to make money I guess! hahahahaha!

CASH GRAIN BIDS
Zip Code:
South Central Coop - Lamoni, IA
Commodity Price Basis Date
Corn 3.25 -0.35 2014-07-22
New-Crop Corn 3.06 -0.62 2014-07-22
Soybeans 12.35 1.5 2014-07-22
New-Crop Soybeans 9.84 -0.74 2014-07-22

Farmers Cooperative Co - Mount Ayr, IA
Commodity Price Basis Date
Corn 3.3 -0.3 2014-07-22
New-Crop Corn 3.13 -0.55 2014-07-22
Soybeans 12.19 0.35 2014-07-22
New-Crop Soybeans 9.73 -0.85 2014-07-22

MFA - Albany, MO
Commodity Price Basis Date
Corn 3.06 -0.54 2014-07-22
New-Crop Corn 2.98 -0.7 2014-07-22
Soybeans 11.09 -0.75 2014-07-22
New-Crop Soybeans 9.68 -0.9 2014-07-22

Gage Fertilizer and Grain - Albany, MO
Commodity Price Basis Date
Corn 3.27 -0.33 2014-07-22
New-Crop Corn 3.27 -0.33 2014-07-22
Soybeans 12.19 0.35 2014-07-22

MFA - Bethany, MO
Commodity Price Basis Date
Corn 3.18 -0.42 2014-07-22
New-Crop Corn 2.98 -0.7 2014-07-22
Soybeans 12.22 0.38 2014-07-22
New-Crop Soybeans 9.68 -0.9 2014-07-22

 

[j-bird]

MO - I am not sure I follow what the diff is between say "corn" and "new - crop corn". I would "assume" (and you know what they say about that) that "corn" is essentially corn harvested from a previous year, while "new-corn" would be corn to be harvested yet this year. Am I even close?

We don't have any sort of major processing plant or anything in my area so why (generally speaking) are your area prices lower than mine?

Also I don't understand the "basis" figure.

I'm not a grain farmer (obviously) but I am interested. Can you explain it in 3rd grader terms?

My local elevator in Indiana:
corn:$3.52 -0.08 (7/22)
new-corn:$3.23 -0.45 (7/22)
beans:$12.69 0.85 (7/22)
new-beans:$10.28 -0.3 (7/22)
wheat (SRW):$4.80 -0.45 (7/22)

 

[foggy]

Wow. Gonna be hard to pay for $10,000/acre land with those commodity prices.

 

[MoBuckChaser]

MO - I am not sure I follow what the diff is between say "corn" and "new - crop corn". I would "assume" (and you know what they say about that) that "corn" is essentially corn harvested from a previous year, while "new-corn" would be corn to be harvested yet this year. Am I even close?

We don't have any sort of major processing plant or anything in my area so why (generally speaking) are your area prices lower than mine?

Also I don't understand the "basis" figure.

I'm not a grain farmer (obviously) but I am interested. Can you explain it in 3rd grader terms?

My local elevator in Indiana:
corn:$3.52 -0.08 (7/22)
new-corn:$3.23 -0.45 (7/22)
beans:$12.69 0.85 (7/22)
new-beans:$10.28 -0.3 (7/22)
wheat (SRW):$4.80 -0.45 (7/22)

You are correct on the old crop corn which can be sold now that was harvest last fall and new crop corn which will be harvested this fall and can not be physically sold til then. However if you want to forward price your corn for this fall delivery, you can at the new crop corn price.

Chicago board of trade sets the futures price that all elevators go off of to set there basis. Futures and basis can change by the minute daily. Resulting in the cash price at any one given elevator. Hope that helps!

 

[MoBuckChaser]

Wow. Gonna be hard to pay for $10,000/acre land with those commodity prices.

Land?.....they won't even pay for the interest on there equipment!

 

[SD51555]

I was talking with my dad the other day. He doesn't grow corn anymore because my brother runs the land. He usually just buys some from him. My brother never turned a wheel this year due to the wet weather. But, my dad is in a good spot right now, because he's just gonna buy 1500 bushels right off the field from a neighbor this fall.

The heads are starting to talk about the national yield average topping 170 bu/a. I expect the corn price will continue to suffer as we get closer to being able to better project the yield. The guys on AgDay were talking about ways to up the prospects for the global corn market. They made a good point that livestock consumption is suffering because the national herds are down, ethanol production is getting more efficient, etc. Gonna be interesting. John Deere stock is already starting to get shaky. It hasn't fallen too much yet, but between corn prices, prevent plant, and depreciation tax law in jeopardy, it's getting hard for them too.

 

[MoBuckChaser]

I was talking with my dad the other day. He doesn't grow corn anymore because my brother runs the land. He usually just buys some from him. My brother never turned a wheel this year due to the wet weather. But, my dad is in a good spot right now, because he's just gonna buy 1500 bushels right off the field from a neighbor this fall.

The heads are starting to talk about the national yield average topping 170 bu/a. I expect the corn price will continue to suffer as we get closer to being able to better project the yield. The guys on AgDay were talking about ways to up the prospects for the global corn market. They made a good point that livestock consumption is suffering because the national herds are down, ethanol production is getting more efficient, etc. Gonna be interesting. John Deere stock is already starting to get shaky. It hasn't fallen too much yet, but between corn prices, prevent plant, and depreciation tax law in jeopardy, it's getting hard for them too.

You started a thread on the Dark Side last year about the prices going to $3 or less. You should go back on there and tell the insurance puke and the CFO of Becks farms what a bunch of idiots they are. What a fool that Beck guy was to state that corn would never go below $4!

 

[dipper]

The last few years hear in south central Wisconsin, irrigation systems having been going up like crazy.

Talked to the farmer who leases our land about costs. He said the well alone will run about $100k.

Yields will certainly go up, but that is a pretty significant investment.

That's because the dnr is going to start regulating their use of water. If the wells are in prior to that, they will be grandfathered in.
These farmers are making the easy investment. There is 0 investment into the soil, except for wind erosion. It's all about immediate profit. You can grow 170 bushel/acre corn in sand with little to no om, but that comes at many costs.
Farmers are very spontaneous, with short term memories. Investors are a different story. There is going to be a food deficit in the next 40 years. Those investors who paid that money might not be around in time to profit from that investment, but no one holds a crystal ball.

 

[MoBuckChaser]

That's because the dnr is going to start regulating their use of water. If the wells are in prior to that, they will be grandfathered in.
These farmers are making the easy investment. There is 0 investment into the soil, except for wind erosion. It's all about immediate profit. You can grow 170 bushel/acre corn in sand with little to no om, but that comes at many costs.
Farmers are very spontaneous, with short term memories. Investors are a different story. There is going to be a food deficit in the next 40 years. Those investors who paid that money might not be around in time to profit from that investment, but no one holds a crystal ball.

For most farmers that is very true. For the ones that are leveraged pretty bad, there will be no next year if they don't make money each and every year. So they focus on what is the most economical way to produce the most amount of product (money) possible in each and every year! They simply can't look long term........ever!

 

[dipper]

They aren't the only ones, it is basically a blanket lifestyle.

 

[SD51555]

You started a thread on the Dark Side last year about the prices going to $3 or less. You should go back on there and tell the insurance puke and the CFO of Becks farms what a bunch of idiots they are. What a fool that Beck guy was to state that corn would never go below $4!

It's not worth it. About once every couple weeks I'll go through their site, and there just isn't any content over there anymore. It seems like every topic comes around fresh about every 30 days. There isn't a continuity of discussion like we have here. I like it here because when a topic starts, we keep going deeper and deeper, and everyone is on the same page so we can advance the discussion.

How many times can you ask if it's a good idea to plant rye and how to kill it? Circles.

Now, about the current situation... Last I heard (and I'm not 100% current) congress let the bonus depreciation allowance expire for capital expenditures. This was a favorite way of some guys I knew to throw money away on an expenditure they otherwise would not have made.

http://www.agweb.com/blog/The_Farm_CPA_243/is_low_section_179_causing_low_equipment_sales/

 

[MoBuckChaser]

It's not worth it. About once every couple weeks I'll go through their site, and there just isn't any content over there anymore. It seems like every topic comes around fresh about every 30 days. There isn't a continuity of discussion like we have here. I like it here because when a topic starts, we keep going deeper and deeper, and everyone is on the same page so we can advance the discussion.

How many times can you ask if it's a good idea to plant rye and how to kill it? Circles.

Now, about the current situation... Last I heard (and I'm not 100% current) congress let the bonus depreciation allowance expire for capital expenditures. This was a favorite way of some guys I knew to throw money away on an expenditure they otherwise would not have made.

http://www.agweb.com/blog/The_Farm_CPA_243/is_low_section_179_causing_low_equipment_sales/

I hear Yah! Hahahahahaha!

 

[Bill]

Just heard on the radio this AM that at this stage of the growing season Missouri's corn crop is shaping up to be the best in years. The guy did mention that timely rains will still be needed to put it in the grain bins but at this stage the crop is bumper.

If that's the case throughout the corn belt it won't make for more expensive corn come Nov.

 

[MoBuckChaser]

Just heard on the radio this AM that at this stage of the growing season Missouri's corn crop is shaping up to be the best in years. The guy did mention that timely rains will still be needed to put it in the grain bins but at this stage the crop is bumper.

If that's the case throughout the corn belt it won't make for more expensive corn come Nov.

Southern Iowa and Northern Missouri look the best I have ever seen. It would take some form of problem some where to reverse the downward trend in Corn this late in the year!

 

[bueller]

The corn in northern IL and southern WI was gigantic by early July

 

[MoBuckChaser]

Someone go on the other site and tell Beck the CFO he is an idiot! Hahahahaha !

He said it will never go below $4. Now he is just wishing in one hand and getting ready to crap in the other! What a fool! Why would it shoot up to $4? Record crop in the main corn belt on the way and the price will go up? Hahahahahaha!

 

[wklman]

Yeah I saw that earlier lol. He seems to have his head stuck in a hole with his hands over his ears going "lalalalala..... I'm not listening".

 

[bwoods11]

It doesn't help corn or bean prices that thousands of acres of CRP and pasture were tilled up for row crop.

Look for CRP/alfalfa and pasture acres to make a comeback

 

[SD51555]

I don't understand how wet corn can affect the price. Farmers got to dry it if it's wet, period. Is he expecting farmers to abandon their crop if they can't get it dry enough? What could make the problem even worse is if there is an early freeze and the test weights come down. Not sure how that affects price, but i know it isn't good at the elevator.

 

[Bill]

Corn is way behind this year??????????

Not to jump on the bashing but Where the heck did he did get that from?

My corn is 7 foot tall, tasseled out and shooting silk. Not to mention its making one heck of a road screen.