Grain prices again

[rambler]

Well, the past couple weeks grain prices fell off a cliff.

Food and feed (other than meat ESP beef) should be getting real cheap soon.

Govt crop report came out this morning, the last several have said we have abundant crops growing that look like bin busters, and we aren't using or exporting near as much as we will grow this year.

So prices are rocketing to the bottom. Wheat especially, protien from beans, and corn follows wheat down.

What does that mean? Feed should be getting cheaper from now into September. You sure don't want to stock up now, let the prices fall some more.

Food from wheat should be coming down with a bit of lag time. Other foods made with wheat, corn, soybean oil - seems to be about everything - should be coming down too.

The exception is meat. We have a shortage of beef critters in this country, keeping the price up and it takes a year to breed a new generation of cattle....

And pork, we have that new pork disease going around making hog prices very unstable and high. A lot of baby pigs are dying from it keeping them in short supply.

Unfortunately, I live in the part of the USA that is having a terrible crop, too much rain by far, so we will not have a lot of grain locally. Sounds like the rest of the country is a garden paradise tho.

Paul

[haypoint]

Last spring I read that corn and soybean prices would pivot around the 4th of July. If we had plenty of moisture, when the beans set pods and corn sets ears, then last year's supply prices would drop. If we were in a drought, last years supply prices would go up.
Lots of corn and bean contracts (futures contracts) were made earlier for this fall's crop. For those that sold contracts for above what the fall prices will be will make money. Those farmers that didn't lock in futures contracts may see prices drop to below cost of production at harvest time.
Corn tasseling out in a few places in central MI. Crops look great. But in OH, I saw areas flooded out and areas just planted last month. Some areas where the weeds are ahead of the corn or beans. Too wet to spray for weeds?
But the wheat and Spelt crop looked good.

[V-NH]

Agway had a sale in June in New Hampshire. All layer foods (crumble, pellet, and mash) were on sale for $10 per 50 pound bag. I doubt I will have to buy layer feed until Christmas.

[haypoint]

Price has dropped to $3.83 a bushel. That is 56 pounds.
http://www.stltoday.com/business/loc...9be2ee60f.html

price trends for the past two years
http://www.nasdaq.com/markets/corn.aspx?timeframe=2y

[gone-a-milkin]

Corn is cheaper than hay right now.

[haypoint]

Originally Posted by gone-a-milkin

Corn is cheaper than hay right now.

True. To some degree that is true because for a while, you could make a lot more in corn than hay and hay fields got plowed under. Hay gets high enough and more will grow it, sending the price back down.
This is how farming goes. I laugh when I hear, "What crop makes the most money?" It changes from year to year. A few years ago, a few acres of pumpkins brought a lot of money. So, everyone grew them, flooding the market. Lots sold for $20 a truckload as deer bait.

Those that paid too much for calves this spring, might be able to cash in on cheap corn and come out rich, as beef is expected to remain high.

[Awnry Abe]

Wow, Haypoint. Looks like your sources are total geniuses. Who woulda thunk they'd get that one right?

Reminds me....back in 1990 Iben Browning predicted a 50-50 chance that the New Madrid fault would get to shaking again that year... (And Wikipedia called it an "erroneous" prediction. But, "Nailed It!", I'd say!)

Regardless, I hope all of those guys with big tractors make buckets of money either way. I'll be happy to pay less at the farm store.

[haypoint]

I think most folks that mess with futures contracts know that every year around the 4th of July, you can get a good idea about how the crop will be at harvest. Not perfect, but good. Many were holding onto soybeans, thinking a bad year and their old stock would be worth more. But signs of a good crop this year would drive prices of old crop soys down by a big margin.
I know a farmer that studies this real close. His income can double or be slashed in half by changes in market trends.
Feed lots forward contract for feed. They may buy corn 9 months ahead. Hard to judge what the price will be then. If you think it will be lower, you take that contract and hope when it is time to be filled, you can buy corn for under that price and profit the difference.
You don't have to be smart to watch millions of acres of hay getting plowed under and put into corn to know hay prices will go up next year. When soys are high for a few years, farmers increase their soybean acreages and the flooded market drops the price.
A few years ago, investment bankers started buying up crude oil futures. Millions of barrels bought up by these folks, created a shortage. Wasn't really a shortage, just the refineries couldn't find any on the open market. So, the shortage caused increased demand. The price went up and the investment bankers sold their contracts for a lot more. Caused the price of gasoline to go up. So, they increased their buying of oil futures. Everyone could see it was an easy way to make money. Eventually, like all ponsey schemes, those that got in late, got stuck with some costly oil and no market.

[Le Petit Norman]

I wish your right but I can't see the food going down at the supermarket ….

[rambler]

Originally Posted by Le Petit Norman

I wish your right but I can't see the food going down at the supermarket ….

Just remember who to blame 'this time' if prices don't come down.

Paul

[HuskyBoris]

hay prices sky rocketed here because the local pig farm has their own feed mill and pays a premium for corn,a lot of hayfields went under and cornfields came up instead,what the market bears can change a lot depending on local trends,corn is big here because of the pigs but 50 miles south of me hayfields are more common because of larger dairy operations and horse farms but they have corn too.
the pig farm does diversify as well,they grow carrots,soybeans,wheat and asparagus fields

[o&itw]

A lot of processed feed is like processed food. When the raw materials go up in cost, so does the product. However processed feed never seems to come down to the extent that the price of grain does.

Case in point, rabbit pellets. They went up several years back when the price of grain took a big hike. They never came back down. This year, locally, they took another big jump and we were told it was because alfalfa had gone way up. Well, we are having a bumper crop of both locally and I suspect we won't see the pellets drop a bit.

[haypoint]

I think there is about 8 cents worth of corn in a $2.50 box of corn flakes. A container of oat meal has about 6 cents of oats.
When corn is $5 a bushel and hog feed is $10 a 50 pound bag, the cost of corn isn't going to be able to change feed prices.
$4.00 diesel keeps farmers from getting rich and controls the cost of processed foods due to transport costs.

[ksfarmer]

I did my part to help grain prices today. Sold my wheat early this morning and it closed $.10 a bushel higher. Happens every year.