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cropsey, il 61731 | Back in 2008 we'd have bearish reports and the market would go up 50 cents. We are not in Kansas anymore (well Jon still is) and the normal ebb and flow of suppliers and demanders hasn't changed much in forever. ADM et al need to run at capacity and might buy a few less or a few more bushels year to year, but I don't think it effects the ability of anyone else to get supply. Animal numbers are down, but we do feed to higher weights especially when the penalty at the packer isn't enough to discourage it. However, most of us growing critters keep doing it regardless of market fluctuations - gotta pay off the buildings. Ray hasn't been fired yet so ethanol will keep chuging along even without a continually increasing mandate.
Like it or not money will flow in and out of our markets sometimes in direct opposition to our fundamentals. We can pat ourselves on the back and suggest our 'welding' did the trick, but Bob, Pete and Frank all needed a grain position by thursday at 10am and they put one on. Btw those guys are working with billions so what ever they do matters. I would like to think they have teams of weather and guru market analysts directing their purchases, but they also know it doesn't matter because "they" will be the cause of the market moving.
It's just a symptom of an economy not giving money other places to go so it lands on markets. Best situation is to understand break evens (where everything including toilet paper is accounted for) and sell at some price above those. Maybe with all the volatility reowning on paper is the way to go. My thought on October 4 was to buy $4 for 6 cents and looky here they are 13 cents now (source 20/20 HS marketing). We have to get our price to stay in business and perhaps adding to that price means taking advantage of forces in our market that don't play by our rules. Or not.
PS: basis will be the only thing that acts in response to fundamentals.
Edited by Pat H 10/29/2014 07:59
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OK so help me with something
