Saturday, January 7, 2012

Grain

My friend Harlan Payne in Southern Illinois posted a good question I found out about yesterday. He asks why grain buyers are offering PL contracts now? By PL he means price later as for example, Delayed Price where the farmer gives up ownership of the grain by moving it and pricing it later in hopes of higher prices.

There are other forms of PL like various forms of hedge contracts or receiving 70% of the price today by delivering the grain and pricing from the board of trade later. It gets very complicated very quickly.

I responded "CGB(Consolidated Grain and Barge) has free DP through March, many took basis contracts this week as the flow of grain was steady down SR 28 to the river.

With all the bin building and moving and repairing, more grain is in farmers hands than ever. That alone has changed in the 8 years I have been here.

"Lots of hot bins already" with the warm temps and fall harvest conditions from southern Illinois clear through the east. Our corn hasn't dried much as the fans run continuously and we watch and smell and keep moving it out on price rises or as we have time to truck it. The price is strong enough to keep selling a little at a time.

The buyers do whatever they can and need to do to keep grain moving and flowing. That is the system.

This sounds like symptoms of a shorter crop than demand or at least a location problem. It's on farms if it is there at all. We have two bins empty and that is early for us this time of the year but it is a different year and we sold more grain than ever for fall delivery. We simply had enough to fill the bins too. We would have made more money if they were all empty and we had sold it all but that didn't happen here.

I was thinking this week my little 60,000 bu set up has moved over a half million bushels of grain in the 8 years we have been here. Probably half beans, half corn over those years, maybe a little more corn. But if average price was $4 on corn and $8 on beans, think of how much money flowed through one little farm in 8 years.

It astounds me.

Another farmer posted that Bayer is changing the formulation of Ignite back to Liberty and raising the price of it. That through several farmers in a tizzy real quickly.

I will post more about that as it becomes news as it impacts me and a lot of farmers using Ignite and/or the Liberty Link seed system.

Ed

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