pricing 2024 crop

[Ronski]

What is going to happen with new crop? It is awful dry here in Alberta but spring rains are what counts here in central AB at least.
Also international markets look dismal from what I have read.
Anybody consider buying put options to set a bottom price in case the market keeps grinding down or sign a deferred delivery for new crop and buy a call option to cover yourself?

Or anyone have the guts to call the bottom and go long or buy call options? (I guess we do that by not pricing production?)

What are everyones thoughts on 2024?

[TOM4CWB]

The US Midwest is very dry as well…
Iowa… Winter Wheat weather has been warm… vulnerable to cold weather… volatility will be very interesting!!!
Blessings and Wisdom!

[dave4441]

A few years ago it would have been amazing to be able to lock today's new crop canola price in. $13-14 was considered high. Now its considered low. So we look for things that impact our bullishness not our bearishness. There are so many crops in this is situation.

[furrowtickler]

A few years ago new or used machinery and land were 40% lower as well .
One would think something should give sooner or later but the markets don’t care and machinery / land still selling so not sure where this ends up .

[dave4441]

Yeah we have seen this before. Markets don't care about costs and farmers have such a wide range of COP that someone is always in the money.

I remember 60 cent red lentil prices in 2015 that people thought would never go down. It was 40 cents for new crop in Dec 2015 for Fall 2016 and 30 cents by 2016 x-mas and 15 cents/lb. the following 2017 fall. Not unlike the canola market the last couple years.

Durum in my opinion will be dragged down further in 2024 by our high prices in the last few years (This also happened in canaryseed in 2004. Prices were high in Canada and Argentina jumped into the crop and never stopped being a competitor). Spread is too wide against wheat. But this is exactly what happened to lentil prices in 2017. Too many people jumped into competing/similar crops globally that competed with lentil prices.

Alot of costs have dropped though. Fuel, glyphosate, fert all better then a couple years ago. I realize fuel and glyphosate are such low costs/acre it doesnt help alot. It boggles my mind some of the land prices being paid though. Especially at these interest rates.

I hear COP ranges on durum wheat, in Sask, from $250/acre all the way to $500/acre. I realize that production ranges wildly across Sask but i think if you truly have $500/ac costs the next couple years will be tough. Who knows what the future brings. I thought $1000/acre for dirt was nuts too.

[wmoebis]

I hear COP ranges on durum wheat, in Sask, from $250/acre all the way to $500/acre. I realize that production ranges wildly across Sask but i think if you truly have $500/ac costs the next couple years will be tough. Who knows what the future brings.

Can we see the break down of those costs? Not disputing just would like to see or show so we non producers can understand what it costs today.

[goalieguy847]

Eyeahhh 500$/ ac? Fixed costs shouldnt be really any higher than 250 to 275... unless youre really giving it some
lets pencil canola
fert= 140$/ ac all in
Truflex 2 pass glyph = 1.33L/ ac @ 6$ ....8$/ ac.
fuel will be 30$/ ac on the highside.
fungicide 20$/ ac.
Bug i cide ( wont need this yr itll be a.perfect year and everyone follows wonderful rotations)
so unless.im totally out to lunch here our fixed costs on canola should be 250 on the top end.

Variable costs is a different story!
im sure there are some shlubs paying 150$/ ac rent and pooping themselves at 14$ canola
...
And running equipment rich $/ ac.
so 500$/ ac is certainly not outside the realm of possibility...
we keep our avg equipment cost under 100$/ ac including necessary infrastructure... its tough to do with equipment values where they are.... and 1 click of the wrong ritchie auction button can double that value in hurry...

[Crestliner]

Eyeahhh 500$/ ac? Fixed costs shouldnt be really any higher than 250 to 275... unless youre really giving it some
lets pencil canola
fert= 140$/ ac all in
Truflex 2 pass glyph = 1.33L/ ac @ 6$ ....8$/ ac.
fuel will be 30$/ ac on the highside.
fungicide 20$/ ac.
Bug i cide ( wont need this yr itll be a.perfect year and everyone follows wonderful rotations)
so unless.im totally out to lunch here our fixed costs on canola should be 250 on the top end.

Variable costs is a different story!
im sure there are some shlubs paying 150$/ ac rent and pooping themselves at 14$ canola
...
And running equipment rich $/ ac.
so 500$/ ac is certainly not outside the realm of possibility...
we keep our avg equipment cost under 100$/ ac including necessary infrastructure... its tough to do with equipment values where they are.... and 1 click of the wrong ritchie auction button can double that value in hurry...

Finally a farmer with a pencil dealing with reality. $1million 1/4's, $1million combines and air drills, $100K half ton trucks, $125-150 rents.....the grain market doesn't care....high cost producers and those spendings daddies equity on stupid deals....soon will understand the word Reset. History always repeats itself....Equipment costs up 60% in two years and record profits for the AG Cos...so some old fashion price gouging not all supply chain issues....when Mr. Farmer runs out of $$$, the Ag Cos...will learn the word Reset too!

Ag Word for 2024- RESET

[dave4441]

Our fuel costs is about $10/acre in Southwest Sask at $1/liter across our entire farm.

[helmsdale]

I'm officially something like 90+% sold as of about 15 minutes ago.

I *wanted* $13 for my CWAD, but the market just isnt going to go there IMHO.

I *wanted* $12 for my peas, and managed to catch the 1 week india blip and dropped them for $13.50.

You win some... you lose some...

Our COP is LOW, but then our top end is embarrassingly low compared to prime dry-country.

general direct expenses here (fert/chem/seed/insurance) are in the $150-175 neighborhood. Add rent/payment, repairs, machinery payments, fuel, interest(a far larger expense than before), etc. $250/ac gross is pathetic in most areas, but honestly considered a "job well done" here. It wasnt so long ago, when $150-175 would do that.

I *do not* see good marketing opportunities in the immediate future. El-nino is fading which likely means reduced drought pressure in US heartland, there are a couple of systems prog'd to dump significant moisture into the I-states, the $CDN, although it should be a peso, seems likely to increase relative to the $US in the near term... I've seen enough "bearish" sentiment that I'm tapping out. I can see a path to commodity inflation perhaps in june/july, but bills being dated what they are, demand payment from poors like me far earlier than I can wait for markets to bounce upward.

[dave4441]

I'm officially something like 90+% sold as of about 15 minutes ago.

I *wanted* $13 for my CWAD, but the market just isnt going to go there IMHO.

I *wanted* $12 for my peas, and managed to catch the 1 week india blip and dropped them for $13.50.

You win some... you lose some...

Our COP is LOW, but then our top end is embarrassingly low compared to prime dry-country.

general direct expenses here (fert/chem/seed/insurance) are in the $150-175 neighborhood. Add rent/payment, repairs, machinery payments, fuel, interest(a far larger expense than before), etc. $250/ac gross is pathetic in most areas, but honestly considered a "job well done" here. It wasnt so long ago, when $150-175 would do that.

I *do not* see good marketing opportunities in the immediate future. El-nino is fading which likely means reduced drought pressure in US heartland, there are a couple of systems prog'd to dump significant moisture into the I-states, the $CDN, although it should be a peso, seems likely to increase relative to the $US in the near term... I've seen enough "bearish" sentiment that I'm tapping out. I can see a path to commodity inflation perhaps in june/july, but bills being dated what they are, demand payment from poors like me far earlier than I can wait for markets to bounce upward.

There could be a million MT plus of durum carried into next crop year. You have likely made the right decision.

[blackpowder]

Guess I'm a schlub. Likely always have been.

An uninformed production concern in July led to lower than normal selling in the usual seasonal peak.
Specialties all gone off combine and half the wheat.
Problem with hanging my hat on next springs high is that it could still be $2 lower than last year. So it's very possible $10 last October might still be unavailable in June.
Will still sell half of 24s then either way.
Road trips this season found no land under $1M / quarter.

[AlbertaFarmer5]

USDA is still at 158.5. They can't both be right.

Aprosoja Brasil estimates 2023/2024 harvest at 135 million tons
Producers who participated in a meeting of the Soy Sector Chamber, on January 11th, in Brasília, expressed their concern about the losses resulting from climate instability in all regions of the country.
Based on data collected by the 15 State Aprosojas, the 2023/2024 harvest already reaches 135 million tons, at most, numbers well below what has been released by public and private institutions and companies in Brazil and abroad.
These data take into account the water stress to which the Central-West states were subjected, such as Mato Grosso, Goiás and Mato Grosso do Sul, and the excess rainfall in areas of these same states, making grain harvesting work difficult and leading to even greater losses to producers.
There are also strong reports from producers in the south of the country, mainly in the state of Paraná, who suffered from excessive rainfall at the beginning of planting and are now facing a lack of rain in areas where soybeans are in the reproductive phase, which compromises the crop productivity. Due to all this instability, Aprosoja Brasil projects an even lower number, if the climate does not change.
According to the directors of Aprosoja Brasil, the publication of data on the market about the harvest that do not match reality has caused a downward trend in prices. Producers, in addition to having reduced productivity, have to deal with prices that are incompatible with reality, causing losses to soybean growers and producing regions.
“When the producer receives a value below what his product is really worth, and which does not cover the cost of production, the loss is not only borne by the producers, but is shared in the form of a reduction in economic activity in the producing regions, which means a reduction in jobs and investment opportunities. In addition to causing producers throughout Brazil to leave their activity, it reduces revenue from municipalities, the state and the Federal Government”, warns Aprosoja Brasil.
Given this situation, the entity recommends that producers take extreme caution and readjust their businesses in the face of this harsh reality. And to the commercial partners who finance the harvest, Aprosoja Brasil asks them to demonstrate the value of the partnership in the face of the producers' eventual inability to honor all scheduled commitments.
Aprosoja Brazil

[Old Cowzilla]

Given that January is a crappy trading month seems quite a few things happening to make things bullish . Anybody know the currant palm oil situation ?

[AlbertaFarmer5]

Given that January is a crappy trading month seems quite a few things happening to make things bullish . Anybody know the currant palm oil situation ?

1 month palm oil chart. Up nearly everyday since New years