Combines Get Out Your Crystal Ball Corn Prices

[Deadduck]

If I knew the answers to those questions, I'd be out on my yacht or at my villa instead of around the farm.

 

[dumbfarmer]

if i knew all those answers i would'nt be on a yacht, i'd still be farming, only with all new stuff and no debt!

 

[dave_morgan]

Amen to that duck! let me kow when you are accepting applications when you DO get it figured out. Old friend told me one time, don't get frustrated trying to figure marketing...Much smarter and very much more educated men than us have been trying to figure marketing for years and on average do no better than we do.

 

[George_2]

When you know the relationship between GREED, FEAR, and CHAOS you will know how to figure out what will happen. Incidently it rarely trades on lOGIC alone, that is higher prices for short supply or large demand, lower prices for low demand or large supply.

 

[theredgreenshow]

The more I think about it, the more sense you make. The demand for commodities HAS to be going up with the population. How much new ground is being developed now. Not much in comparison to 50 years ago with all of the dams and irrigation projects going in then. I would have bet that after 1996 we would never see $3.00 wheat or $2.00 corn again, but it always seems to fall back to prices where a few make money, most just survive and the rest go out of business.

 

[Chads]

Don't forget about the southern hemisphere. Chads

 

[Deadduck]

Warning! longwinded Academic Content! Proceed at your own risk! Thomas Malthus once theorized that the earth's population would continue to increase until it overwelmed the earth's ability to sustain it. Mass stavation would occur then humankind would vanish. Malthusian theory is behind much of the population control_planned parenthood philosophy and also central to the radical environmental movement. So far his theory has proven incorrect, as technology has found a way to sustain the world population. Most of the starvation that has occured in Africa and Asia has been due to political oppresion, war, and poverty, not due to lack of food supply. While an increasing world population will demand more food, that won't necessarily result in higher commodity prices. There are three major factors that affect what we recieve for our crops. First is demand. True economic demand can only occur if there is an ability to pay or trade for a good. While the demand for food in some sub-Saharan African countries is high, they have no way to pay for it or are politically prohibited from doing so. But there will be an increasing demand from China, India, and the Pacific Rim, which is where most of the populaiton growth is occuring. So the demand side looks pretty good. Second is Supply. Our current problem is the supply side. The US has produced record crops, both in raw production and per-acre yields, across all commodities. As Chads indicated, South American nations, particularly Brazil and Argentina, have vastly increased the number of acres in production. Furthermore, due to technolgical advances in these nations, per-acre yeilds are on the increase as well. Similarly, areas such as Russia, Eastern Europe, China and India are benefitting from better seed, chemical, and fertilzer technology, as well as more mechanization. This will vastly increase their yeilds over the next decade, increasing supply over demand. The term "agricultural treadmill" has been used to describe our current situation. The thesis of this argument is that like a man running on a treadmill, farmers are constantly running but not going anywhere. Technology in agriculture never really benefits the farmer, because any type of technology that improves yeilds or allows a farmer to farm more acres, creates an over-supply situation which lowers prices. Therefore, the farmer makes higher yields, but gets less per bushel. This is why parity, the comparison of what a bushel of grain will purchase now versus what it once would purchase, will never be realized. The theory also states that the early adapters of technology are the only ones that truly benefit from it, because they can capture the higher yields at the higher prices. The third factor in our commodity prices is politics and logistics. This is an area in which I am less well versed, but suffice it to say that treaties, wars, tarriffs, subsidies, etc all play a factor in where and when our commodities can be sold. If it's more expensive to ship from our country, and it often is due to unionized dock workers, we'll be at a comparative disadvantage. I'll put currency exchange rates in here too. A weak dollar like we now have is good for our commodity prices. Anyway, don't expect commodity prices to skyrocket any time soon. Just watch for pricing opportunities and don't get greedy. I booked 20,000 bushels of Nov. soybeans yesterday at $5.95 - .17 basis for Sept. delivery. Maybe they'll go up, but if not I have about a third of my crop sold.

 

[FR]

Well if every body did the oppisite of what I do they would all make money I always sell at the bottom,so if you get it figured out let us all know.