beans

[checking]

How well do you believe that Redriver farmer sleeps at night knowing where his inventory is verses the guy that forced himself (had no option but) to sell his grain off the combine to buy paper? I'd say the Redriver farmer knows where his bird is and doesn't stress himself out on carrying cost. I find it strange that die-hard paper players suddenly put up 200,000 bushels of storage, and have grain bags all over the country side because inventory is a bad idea. I'd say it was the best insurance any farmer could carry.

[checking]

Most who carry grain gave no idea how to figure a carrying cost.

Those who don't own it on paper, usually don't know how, and hate the guys that say they do it.

CASH IS KING!!!

Grain inventory is not cash boys.

[checking]

Hey! I could become a "cross" checker, but you as a young whipper "snapper" should not be throwing words around like "hate". I totally believe Charliep and his $16.00/tonne, but so what. I presently don't have a need to cash in my very comfortable security blanket inventory, but I can see those with a paper craving as having more risk to deal with than with my method of hold it and sell it when I need to. Seriously, why go to the trouble of trying to grow a crop if your real interest is in shuffling paper where the real money is. You are in the wrong business. You need to let your farm go to the muddlers like myself.

[charliep]

Trying to steer down the center of this one. Nothing wrong with storing as long as costs are recognized in the context of an individual business objectives/marketing plan.

One place comment though is on flipping contract months on things like basis contracts and having futures carry costs included in the new basis (example of having a canola basis widen from $40 to $70). This applies to CWB fixed price contracts and canola. I can comment I have only seen this work out less than 10 % of the time. First comment is to pay attention to these contracts and pull the trigger on price well ahead of expiry. If you get yourself in the bind of a contract coming to the end/poor price, pull the trigger anyway/price out and replace with calls/long futures. Once you have removed basis from the calculation, futures/cash values will move together. More cash in your pocket and the monthly statement which highlights in spades whether you made a good decision or a bad one.

[ado089]

I guess I wasn't saying don't have storage either after all March is typicaly the best time to move canola and if there is any significant contango in the market you need to forward market that high month. (Anyone jump on $11 March last week?) But if you think that having bins makes you exempt from knowing and exercising your marketing options you're a fool. You're marketing will have a bigger impact on your bottom line than anything you can cut from you inputs. Remember it takes 250lbs of fert to grow 2200lb of grain. That means getting an extra $10/mt on you grain is the same as saving $100/mt on your fert. I know where I focus my efforts.