Price rally or price recovery?

[furrowtickler]

I had this argument with a local elevator rep a few days back. She insisted this today's prices were fantastic. This thew me back a bit, and I told her that this is actually the tail end of a price recovery and from here on in any market direction upwards should be considered a price rally. She just gave me a blank look, then said that the market for most grains/oilseeds was over a dollar a bus higher than last year. I agreed, then told her that the whole grain/oilseeds industry stole from desperate farmers the last 2 years.
It is just the notion that the grain co's want us to belive that these are high prices, yes they are much better but in my opinion by no way high yet.
I did not mean to be rude to the rep but I am not doing back flips yet. Hopefully the market stabilizes and prices move up and down from current levels. JMO

[chaffmeister]

I wouldn't put too much stock into what an elevator rep says about market direction. With all due respect to the species, they are meant to manage an elevator facility, not prognosticate about the market. They get market info and opinions from head office and the internet, but typically they are lacking in a big way when it comes to market savvy.

Over the years (too many) I've been hired (as a consultant) by 4 different elevator companies to train their elevator staff on how the markets work, where to look for market information, what drives a market, entry-level assessment stuff. I was hired BECAUSE - these companies saw that farmers knew more than their field staff.

I guess I'm saying, don't expect them to know everything. And also, what they say isn't necessarily spoon-fed so they can manipulate you guys. Grain companies are intermediaries - middlemen. They truly don't care whether the price is high or low; they make their money by managing their assets - not by buying low and selling high.

[SASKFARMER3]

I agree but also some of my market experts (advisers who I pay for their service) have sent emails along the same line, prices at top of market.
hell if this is the top in HRS and Canola barley and oats were all sunk.

[grainboy]

lets just remeber whether its an elavator agent, a "consultant", pulse plant, or rep of any sort everyone has a motive ... and there is nothing wrong with that. if i buy green lentils i'll tell you we should all grow green lentils and vice versa with red lentils. if i am a grain buyer i just want you to feel warm and fuzzy no matter what the price is because if the price is high or low i still want your grain. maybe its not quite that simplistic but i dont think its too far off.

[Zaphod]

I agree with the comments about elevator folks. Their job is to buy grain as low as possible. There's nothing wrong with that as long as we recognize it.

That said, some markets are at long-term highs. I would definitely put oats in that category. And we've had a few shots this summer at long-term highs in wheat. Barley is getting there but I think it still has some room to go yet. Canola is only in the middle of the long-term price range and there's lots of upside room yet. Most pulses (other than chickpeas) also have room to go yet.

We've got to guard against two temptations; 1. pricing too early in a recovery and 2. trying pick the absolute top (hitting the peak is far more luck than brains). Selling bits of the crop into the rally won't get you the peak, but it beats crying in your corn flakes after the market has collapsed. Knowing costs helps too. If you can't make money with $2.50 oats, maybe it's time to start looking for other work.