I was at a farmer meeting put on by Richardson today. Basic premise of the meeting
was the shipping backlog is not our fault.
They were also trying to justify why the basis isn't going to improve. Sell now before
we pull our bids. This backlog is going to be here for years.
They showed carryout of all grains going from roughly 8.5 mt increasing to 25 or
26mt and staying there because of last year's production. However I noticed they
used a figure for future total production that is about 10 mt higher than the ten
year average.
When he was questioned on it, he said oh well we believe production is increasing.
But if they use ave. production the problem is gone in two years.
The jist of it is they believe high basis levels are here for a long time.
My thought is " the second year of a drought is never as bad as the first" because
people plan better. Farmers will have a plan A and B to deal with tight cashflow
going forward and stocks may be high but basis levels will need to get better to get
delivery.
What do you think?
was the shipping backlog is not our fault.
They were also trying to justify why the basis isn't going to improve. Sell now before
we pull our bids. This backlog is going to be here for years.
They showed carryout of all grains going from roughly 8.5 mt increasing to 25 or
26mt and staying there because of last year's production. However I noticed they
used a figure for future total production that is about 10 mt higher than the ten
year average.
When he was questioned on it, he said oh well we believe production is increasing.
But if they use ave. production the problem is gone in two years.
The jist of it is they believe high basis levels are here for a long time.
My thought is " the second year of a drought is never as bad as the first" because
people plan better. Farmers will have a plan A and B to deal with tight cashflow
going forward and stocks may be high but basis levels will need to get better to get
delivery.
What do you think?