Eastern Idaho | Cole Sibley - 12/2/2016 13:25
I've tried all of AB's contracts over the years, and never came out any better than if I would have just priced it. That has just been my experience though, and is not a recommendation either way. It sounds like you understand their options well, so it is just a matter of guessing what the market is going to do. Their basis contract is in theory supposed to work good in a rising market, but who knows what the market is going to do (not me). I would like to think that Chicago wheat can't go to zero, but at this point I wouldn't bet the farm on that either.
Good luck to you either way. I'm agonizing on whether to even grow any barley again, since the change to InBev, I find it not very fun dealing with them. But good gawd why would anybody want to grow wheat?!?
P.S. to add: Gossip says that InBev is absolutely swimming in barley at this point, which leads me to believe two things 1) contracts are going to be very limited (get in fast if you are going to) and 2) basis just ain't going to get much better. Again, these are just opinions based on gossip, who really knows.
Sounds like we're of the same line of thinking! Only a couple years have I seen one of the other contracts do better than the straight pricing. They tell me the contracted bushels have been cut in half this year, mine were reduced by a third. My allotted bushels have been secured for '17 though. 20/20 hindsight, I wish I would have jumped ship on the Inbev boat, and paddled over to the SS Miller/Coors when I had the chance.
I feel like there may be more upside potential for CBOT then downside, but I also feel like I'm not qualified to make that decision. I do like the way AB/Inbev basis floats against the board more the last few years, rather than some fictional number based on make believe freight rates like they use to do it.
Part of my brain thinks there is not much hope for CBOT with the rising currency, and all the low protein wheat that needs to be exported, the other part thinks it can't get much lower........can it?....... But if Crude goes on a bull run after Don takes over and slaps sanctions back on Iran, "a rising tide lifts all boats".....right?...... La Nina means drier for the soft red areas.....right?... Depressed prices keeps acres out of production....right?.....
For the rest of my cereal acres, I'm thinking I might plant more flax and mustard given the harvest problems in Canada, and maybe HRS wheat. I left summer fallow unplanted this fall that was slated for hard white winter. |
ZWZ17 Crystal Ball?
