Hot and Dry and Canola prices crash day two!

[charliep]

dmlfarmer

I agree that grain marketing is a margin business. It is also a volume business. A smaller crop (particularly regionalized) and smaller handle means less money.

A volatile market also makes managing price risk just that more difficult. Supply risk will also come into play and be felt in basis.

Will be a tough year for everyone in the grain industry.

[SASKFARMER3]

Oh did I hurt your feelings, suck it up butter cup!
Life and farming aren't easy.
I'm actually happy so far I got what I wanted a dry year!
Little dryer than I wanted but still the relentless rain stopped'

Grain companies Chen companies Fert companies equipment etc all need you mr farmer but they want all the cream and leave most with rotten cheese!

[dmlfarmer]

Charlie you are right in lower volumes mean less money, but only if basis remains constant. With next to no competition companies can (and have) widened the basis to increase profits. So we handle less but make more on every tonne. We are only going to turn our facilities 3 times instead of 6 so we have to increase our handling costs to reflect lower volumes and less turns.
Oh, and we also have to widen basis because of increased risk in sourcing grain. Therefore we cannot raise prices even if the crop may be short this year because our costs could go up.
Oh, and lets close a few facilities in short crop areas and let the farmers haul another 100 kms to next facility. It will save us money! Farmers will haul the extra 100 kms because they have less to haul so should not be a factor.

The whole game is rigged and unless we as farmers learn to play the game we lose! Got a great crop coming this year!!!

[charliep]

The year will prove us right or wrong. I will comment that there will be a difference in basis between having 40 trucks lined up at a grain companies drive way and 2 months behind on accepting DDC contracts and having a train sitting on your siding/not enough grain to fill it.

At the end of the day, the whole process is about having a ship arriving at port and developing the logistics to load it. That will be a grain companies risk this year.

[TASFarms]

Ice futures is rigged. End of story

[bucket]

Charliep

There is no risk to the graincos.

Some boats waited over a month to load on the last few weeks. They just dropped the price on the next boatload to make up for it.

Market and most farmers don't know that.

[bucket]

Good then.

Make sure you send the cheque back for the guys that did your bidding for you.

I don't like subsidizing the riders or evraz or protecting potash Corp. As strategic assets but it happens and farmers drive alot of those strategic assets indirectly.

[charliep]

Just curious if you pay tax. I assume that if you are paying tax, you are making money.

[bucket]

Yeah. I like paying taxes so government employees get paid to ask ignorant questions. Fair enough.

[Braveheart]

So why bite Charlie's head off? He tries (voluntarily) to help people look inside their marketing plans and decision making, offers stats and charts most of us wouldn't dig up and some of you attack? I don't get it. Maybe SK3 is right. Ah, I just don't get it.

[ado089]

Yeah I don't get the hostility towards Charlie and Errol. But if you're looking to blame someone to blame for the drop in futures it was me. I took a stupidly big long position last week. I could make money by notifying people when I take positions. Do the opposite and you'll do well. Haha

[sumdumguy]

I contemplated going long Canola a couple of weeks ago, but have learned to do the opposite of a logical position, so chicken-chicken dumguy. Brock-brock.