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Boone Co. Iowa | John,
I heartily echo your thoughts on the setting of price, supply and demand, and that the futures market is different than the cash market.
I always look at the supply and demand, according to the futures market, as the national (and I suppose international) kind of overview, and that localities like local ethanol plants bid up a price with their basis. I kind of wonder "what if" each and every farm had a posted bid, i.e. I'll sell you 5000 bushels at $4.10; first buyer that takes that price, gets 5000 bu. of my corn, beans, etc. It would be a much more "efficient" market if the idea were to discover the price, as well as supply and demand. And, every sale like that was recorded in a ledger so that the "local" market could see the actual transactions.
If I knew how much the local ethanol plant had bought for September, I would be a lot better informed at where I might price my product. If I was running an ethanol plant, I'd keep a good track record of X bushels bought by X farmer, and have a decent idea of how much corn in the county(ies) was still available.
I always get this nice satisfaction when the grain buyer tells me he will give me 2-3 cents over his posted price...."just for me."
What would be the harm (other than embarassment of a low sale) of posting every transaction that you did with local elevator or grain buyer/ end-user??
But, we farmers have always been price takers and I am sure that the folks in Chicago on the board of trade know what they are doing....
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The "out of soybeans" thread below.
