Thoughts on the market/strategies

[hobbyfrmr]

Charlie,
Industry rhetoric creates a lot of price suppression. Just as supplies start to look tight, china will report they found 41 billion bushels of corn in a quonset some where in the middle of china. Prices stay flat for another 3 months.
I do find newagtalk market talk forum valuable. We might as well stay in tune with US production. There is usually some good insight to what is happening there. That usually has an effect on Canada prices. The difficulty delivering grain to export position is not going away anytime soon. CP went up from 115.00 to 198.00, CN Rail went from 49.00 to 74.00. They are not going to stop that recipe of success. Grain is not not on the top of that list!

[hedgehog]

Perhaps my landlord will be less keen to eject me now that the rent klondyke he anticipated is receding fast.

[charliep]

Haven't done but would be interesting to plot CN or CP share prices along side the US and Canadian stock indexes, would they out preform or under. Not sure over what period you are showing your change in stock prices but the dow jones moved 7,000 points February 2009 to 17,000 today. Lots here will tell you the indexes are at risk reflecting the underlying share values/economic challenges ahead. Railways will not be immune from this.

My experience is markets move up and down. The overall trend is up. The challenge is costs have as well. Farmers biggest risks are the capital (land and equipment) and debt side of their business.

[TOM4CWB]

Dear Charlie,

I would respectfully add that grain prices moving below our cost of production... in many places in western Canada this fall it will not likely cover the grain farm variable costs... let alone Capital and depreciation.

If growers are forced into selling at the present prices... with production down 30-50 percent from last year.... it will be a very depressing fall and winter in the grain sector. Thankfully livestock growers will take up some of the slack on income in local communities.

From the view I see today... tough year upcoming.

All the best.

[charliep]

I sometimes feel like a dog chasing its tail versus the expert some people like to label me/my peers as.

So we will have 1/3 less crop this year. Looking at gross revenue (yield times price), not good. Having said, is realistic to forecast a repeat of the 2013 crop every year? This whole last year, I listened to guys complain about producing too much.

Prices coming down as a result of lower international values. Okay. Basis levels improving as things unclog this fall/winter. Has happened with canola today. Stay tuned Use the marketing tools at your disposal to accomplish your business objectives/financial realities.

My interest is always been in working with farm managers to make money in a risky world (highlighting that risk is both good outcomes and bad ones). There has been a big difference in operations in 2013/14 between guys who marketed crop early at higher prices and got it moved versus others who struggled to move/price this last years crop.

I am going to find it interesting in how farmers approach the current crop year. Things have returned to more normal with August and September weather likely to add more twists and turns.

[ado089]

Good comments Tom. Highlighting the importance of being able to access the world price when they are strong.