How do you read corn prices? 241-1/2 what??

Discussion in 'Homesteading Questions' started by cc-rider, Jul 22, 2005.

  1. cc-rider

    cc-rider Baroness of TisaWee Farm Supporter

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    Help!

    I'm trying to find out what corn prices are right now. The Chicago Board of Trade (or whatever!) is saying "down 7, 241-1/2" What does that mean per bushel?

    The land I'm trying to buy is currently in corn and the owner wants the market value of the corn if I buy it now. I'm guessing 200 bushel per acre??? Is that too optimistic? I'm in NW Ohio, where crops are decent right now.

    (Before you worry - yes, I still have the 112 acres of woods we just bought down south....but that's retirement property! I need a place to live in NOW)

    Chris
     
  2. farminghandyman

    farminghandyman Well-Known Member Supporter

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    buy the land and let him finish harvesting the crop of the land or have it done, in other words he retains rights to the growning crop,(normal in our area when ag land is sold,)

    call a bank that deals in ag loans, and you will find out they value a growning crop very low, now once it is in the bin, that is a diffrent story,

    the price would be 2.41 at the point of delivery, where ever the bid was made,

    call a local grain market in the area, the producer pays the frieght, so that is subtracted,
    to find out the local price, like in our area,

    jsut looked at the board and the september delivery price was "236.6" or $2.36 but the local market was, $2.08

    corn is very volital right now with the drouth in the mid west, up one day and down the next,

    I know in our area I would not give a person 50% of the estmanted value of the growning crop in our area, to many things could happen yet, before harvest, call the bank and talk to a loan officer that deals in ag operating loans and see how they value a growing crop,
     

  3. Snakeoil

    Snakeoil Well-Known Member

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    200 bushels to the acre is a dream in most areas. Also you do not want to pay the Chicago Board of Trade prices as they will be higher than your local grain elevator. The local ASCS office can tell you what the land your looking at has averaged in the past years as far as yield goes. But this year in the midwest has been very stressful for corn and soybeans, so yields will be affected in a negitive way. Call your local elevator and they will tell you the price of corn they are paying now.
     
  4. rambler

    rambler Well-Known Member Supporter

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    It means corn in Chicago has gone down 7 cents from yesterday, & is worth $2.41 1/2 per bu.

    You then need to know your local 'basis', or how much below (or sometimes above) the Chicago Board the local corn is selling for. Here in Minnesota the basis is often over 40 cents a bu. so we actually would get around $2 a bu for our corn.


    As others are saying, things are really odd for you. That is not a normal way to handle your type of transaction. The owner is actually cheating you very, very much on that deal. Current value of the corn is at most 50% of a normal crop. Who is going to pay for harvesting this corn? That at the least shoud be deducted. There is risk of weather, insect, or other damage to the crop between now & then. That risk has a value to it. 200 bu is a nice goal, but rarely achieved. I doubt you can count on getting that, just as eay to get 100 bu if you run into eather problems. Who is going to pay for drying the corn? Getting 5-10% moisture out of the corn costs money. Corn is rather high priced now due to weather scares; it will be much much lower during harvest time.

    That owner is pretty sharp. He is taking you on quite a ride.

    Most ag land transactions allow the current crop & property taxes to remain with the current owner until the end of harvest. That would be a far, far better way for you to handle this. You are really going to take a bath if you try the route you are on. You want to pay 200bu x $2.41 is $482 an acre for corn that will pay you 150bu x $1.80 local price at harvest minus $21 harvest cost minus $7.50 transportation cost minus $15 drying cost equals $226.5 an acre net to you.

    The fellow is bilking you (on average - farming is a risk, and it could go your way or his way an additional $150 an acre - no one know what the actual price or yield will be for sure....) for $250 an acre if you go ahead with this the way you are thinking.

    --->Paul
     
  5. cc-rider

    cc-rider Baroness of TisaWee Farm Supporter

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    Actually, I'm not paying for the corn crop - the seller would be. She evidently rented it to someone to farm while she had it for sale.

    The agreement is that if someone buys it and wants it immediately (before the corn is harvested), the seller will reimburse him for the corn. I was trying to figure out what it would cost her if I bought it now and wanted to use the land immediately. Negotiating factor. I'll offer less if I agree to not disturb the land until the corn is off.

    I would like a PORTION of the land NOW because I need to get a septic system in before November. Our county won't let them be installed between November and May.... and in May the septic rules change for the whole state of Ohio. It will cost me about $6K to install a system before November... about $20+K if I wait til next spring/summer.

    Thanks for your advise! I couldn't figure out what 241 was!!!