Grain markets are "like the slow drip of a leaky faucet that no one can fix."

[RWT101]

You are absolutely right Crusher.

Mother Nature will 'adjust' the markets with a couple of cool, if not cold, years.

Just look at at Mallee's pic of the grain less wheat some are combining in Oz.

And we are not yet at the bottom of the sunspot cycle.

Stay tuned.

[farmaholic]

So it only matters when Mother Nature interrupts the supply....not the producers holding the supply?

[farmaholic]

I guess so, when there is none there is none.

[fjlip]

So it only matters when Mother Nature interrupts the supply....not the producers holding the supply?

However if you can STORE it... in 60's Dad said the price was $0.60 / bu. NO quota, they stored some for 3 years. In 1967 he hauled wheat for weeks with OPEN QUOTA, not sure of price.
Only a 300 bu truck and shoveling wooden bins, but 4 mile haul, dream of that today.

[RWT101]

Looks like this grain marketing thingy has been going on for a long, long time, like 4000 years.


"Genesis 41:53-57New International Version (NIV)

The seven years of abundance in Egypt came to an end, and the seven years of famine began, just as Joseph had said. There was famine in all the other lands, but in the whole land of Egypt there was food. When all Egypt began to feel the famine, the people cried to Pharaoh for food. Then Pharaoh told all the Egyptians, “Go to Joseph and do what he tells you.”

When the famine had spread over the whole country, Joseph opened all the storehouses and sold grain to the Egyptians, for the famine was severe throughout Egypt. And all the world came to Egypt to buy grain from Joseph, because the famine was severe everywhere."


The biblical quote starts off this book - WEATHER CYCLES - Real or Imaginary? by W J Burroughs

Fascinating read on cycles and how the sun influences the weather on earth.

Nobody has figured it out yet for sure which makes this relationship the Holy Grail of weather and climate.

I bought the book to figure out the relationship between grain prices and the sun.
People, like Jevons, as far back as the 1700s saw a relationship but did not know how it was caused.

I have an idea in general how it works but it is not yet possible to forecast a drought of say 30 to 60 days in a specific area, like western Canada.
Nor will it probably ever be possible to be that specific, from what I've seen.

Sure would help grain marketing if one could though.

[Bowerpower]

However if you can STORE it... in 60's Dad said the price was $0.60 / bu. NO quota, they stored some for 3 years. In 1967 he hauled wheat for weeks with OPEN QUOTA, not sure of price.
Only a 300 bu truck and shoveling wooden bins, but 4 mile haul, dream of that today.

like
Store and wait, can't fix supply, everyone producing. Im starting to think I need storage for 2 crops minimum.

[MBgrower]

like
Store and wait, can't fix supply, everyone producing. Im starting to think I need storage for 2 crops minimum.

I'm thinking the same, two years of storage likely required.

[errolanderson]

I'm thinking the same, two years of storage likely required.

Or alternatively, sell the cash and replace with paper . . . then you won't need all those grain bins and lowers your risk of storage.

[bucket]

So I sell my lentils at 18 cents...my peas at 6.50 .....my flax at 12.25....my durum at 7.25....

And replace it with what paper?

Storage problem solved and then the trip to the banker or real estate agent..to sign papers?

[fjlip]

Or alternatively, sell the cash and replace with paper . . . then you won't need all those grain bins and lowers your risk of storage.

That is the theory but nobody seems to ever practice on many bushels...in a decreasing price market how will that work? For 2 or 3 years?

[errolanderson]

That is the theory but nobody seems to ever practice on many bushels...in a decreasing price market how will that work? For 2 or 3 years?

How will that work if you have unpriced wheat in your bin?

The decision to store or replace with paper varies between farms and financial health. If you have a lot of bins, solid storage conditions and don't need the cashflow, farm storage is great to wait out depressed markets. But if you need the cash, sell the physical wheat and replace with paper effectively injects cash into your operation.

There is also a protein question here. If you have high protein, you may want to take advantage of these strong premiums and flat-price. But the same can be said for low protein. If the feed market is your only market, replacing with paper may upgrade your quality.

Food-for-thought . . . .

[blackpowder]

Thing is. Paper is cash and it expires. Thats the tricky part.

[MBgrower]

Or alternatively, sell the cash and replace with paper . . . then you won't need all those grain bins and lowers your risk of storage.

cant hedge basis, blending old crop into new crop, etc. using marketing futures, options, fx markets is quite simple, but often not practical. richest farmers I know always have grain in the bin.

[farming101]

richest farmers I know always have grain in the bin.

Always....

[farmaholic]

Always....

Or a stack of deferred grain checks that could choke a T-Rex!