Cotton, throwing a dart at target prices would probably work as well as any of those analysts. They are always right 50 % of the time. Best wishes for the season and may your portfolio recover.
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Cottonpicken, I think that it is too hard to market based on perceptions, predictions and emmotions. I think it will lead to disappointment as many times as it leads to better profits. A lot of people I know when the markets have gone up, and they have generally rallied in the past two years, have held off and made money. That has come to an end this year. What I have learned is that farming is all about risk management. Before I plant something I estimate my costs per acre to grow the crop including depreciation of equipment. Then I figure our what a good return on investment is based on current interest rates, risk premiums, etc based on average yields in the past few years which I keep track of. If the return is 10% for example, then I make a few calculations which figures out a price per ton or bushel. Obviously, when inputs are higher, you need a better price for your grains. Then my futures broker has provided me with hit and miss charts. They tell me how many times the prices for the new crop futures have been at or higher than the various price levels. For example, between Nov futures months since 2001 all the way to 2010, the futures have hit $350 per ton every year. What this means is that if my local basis is $-30 under the canola futures and when I calculate what I need to sell canola for at $320. Well the market from 2001 to the futures months 2010 (which is currently sort of trading right now)has hit $350 every year. When I move up to $390, it has hit is 7 times out of the ten futures months at one point which means that if I put in a target price contract at $360 per ton earlier in the year, there is a 7/10 chance that it will hit. The odds go down as you get higher prices. The $750 Nov futures has only hit once. When I saw that this year and I noticed that even though my input costs are extremely high, I should sell some grain at these levels. I have been through the emotions of selling and having the market go up or not selling and having the market go down.
When I started taking risk management courses, I had an epiphany or a paradigm shift if you will. My job is to grow grain and make a profit, not try to outguess and speculate when I have grain hoping for more. Now, it doesn't bother me when the prices go up and I sell because I know that I have locked in a profit and that is the best anyone can do. You don't go broke locking in profits. That is what a lot of the crushers do. They sell soymeal and soyoil futures and either buy the cash canola, the canola futures or if they are crushing soybeans, the soybean futures and after that it doesn't matter where the markets go they have a profit locked in. The only risk is basis which can erode or create larger profits but it only moves 20 to 30 dollars per ton where the futures can move hundreds of dollars. Anyway, I don't profess to know everything but most people I talk to don't look at marketing this way.
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classicalliberal;
WELCOME!
Have FUN... there are many ideas here... which is what makes this forum fun and expands our world!
The more we think 'outside the box'... the less likely we will be blind sided by history!
GRIN!
'Everything in human activity has happened before... just not necessarily when we were around to watch!'
( > :{
Merry Christmas... and may 2009 bring prosperity!
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Sounds like this "non-commmunist" wants to SHARE his wealth of knowledge for the betterment of fellow Agrivillian comrades.
Truly, not a capitalist.
You need to talk to Franny, he will teach you.
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Grainbeetle;
I understand you believe the theory of collectivism is key to solving our problems.
Do you not hold that man is not an end to himself, but is only a tool to serve the ends of others? Don't you hold that the group as the primary, and the standard of moral value? Does it matter whether that group is a dictator's gang, the nation, society, the race, (the) god(s), the majority, the community, the tribe, etc.?
Isn't the point you make that I in principle am to be the sacrificial victim, whose only value is my ability to sacrifice my happiness for the will of your "group"?
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I swear, what I meant to say is that I don't believe in communistic/socialist marketing. I just forgot to put "don't." Do you think a communist uses the futures market to lock in profits? Communists are not supposed to make any profits and any that they do have to be shared with the next guy who didn't do anything to deserve those profits.
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TOM4CWB, you sound like my kind of guy. Pro-business, progressive, capitalistic, etc. If you are interested, I do some blogging on the CBC CWB articles. Some of those farmers, or those who claim to be farmers, are pretty socialist. I think they must be members of the National Farmers Union with Wayne Easter and Stewart Wells. I have been accused of being an Americanized corporate farm owner who is un-Canadian for not believing that the CWB is the best thing for farmers since Round-up (minus the initial costs of it). I would like your help in taking on these commies.
Here are the links:
Canadian Wheat Board Election Results Announced
http://www.cbc.ca/canada/saskatchewan/story/2008/12/08/canadian-wheat-board.html?ref=rss
Some Prairie Farmers Smiling After Final Wheat Board Payment
http://www.cbc.ca/canada/manitoba/story/2008/12/17/wheat-board.html
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There's nothing wrong with sharing information and working together provided that each individual in the group is better off in the end then they would have been not sharing and working together.
The problem with the CWB is that it often punishes those who could do their own marketing and rewards those who just haul in their grain and then sit on their hands.
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