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Red River Valley |
First off One needs to decide how much faith you are willing to put into USDA numbers for me at this point in the growing season I tend to think they are pretty close on what finial Yields will be.
So we are set with supply for this year and supply ranges under average weather conditions. You also will have to decide if you believe in trend line yields or not - I do
So I will assume that the crop over the last 2 Years are reasonable crops going forward - I will assume this because neither of these two crops were grown under perfect conditions but under slightly better than avg. conditions ( this is derived by using the Info from posters to this site and other sites along with contacts through out the Industry ) so If we use the last two years crop Yield and add trend to it we should be able to leave our self's with a good guess on US supply, then we simply need to see where the rest of the world will be on supply and I have no other choice than to kind of use a slightly increasing( 2-4 % per year ) Increase in world production.
On the demand side I will use a flat US demand for all crops ( this assumes the rest of the world supply increase covers any demand Increase. so setting those as my parameters it leaves me with reasonable guess ( at least reasonable to me ).
I think the 5 year time frame will leave us at or near these prices baring a major world wide drought.
on Corn I think that the price will be between $2.90 and $4.80 over the next 5 years with the majority of the days below $4.00
On Wheat ( DNS ) the price range is $3.90 to $6.10 with the majority of the days below $5.10
Beans Price range $7.00 to $11.50 with the majority below $10.00
Corn above $4.50 will bring imports into the US and further kill our Export base, Wheat will at times have to get into feed rations in order to move all of it and in Beans we have become the second supplier to the world which means it will most likely take back to back poor beans crops to spike prices.
When the early ethanol push was on many of us thought that with ethanol the US would be the corn growers to the world and SA would be the bean growers and I think that is where we will be in a couple of years.
most of the best opportunities for selling corn and wheat IMHO will be before it is harvested The carry structure in these two crops is the reason I believe this.
being patient at this time may well prove very beneficial to your son as the Farmer that are in their 70's now have to adjust to farming in a low profit environment, most of these guys have gotten way to used of either trading equipment every couple of years or taking it to the dealership and having them fix everything on it. Those cost will no longer be easy to cover and you may very well see these guy's say to heck with it time to pull the pin and live out my later years. Top that off with those that have been taking on debt with high priced land and new Iron and there may well be a lot of available opportunities.
Take care and good luck | |
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- Okay Sat ,fishy and others with a bearish view - JC STONE : 10/18/2015 13:27
- RE: Okay Sat ,fishy and others with a bearish view - BShauler : 10/18/2015 13:36
- RE: Okay Sat ,fishy and others with a bearish view - turdypointbuck : 10/18/2015 13:58
- RE: Okay Sat ,fishy and others with a bearish view - Cornstalk1 : 10/18/2015 14:31
- RE: Okay Sat ,fishy and others with a bearish view - frytownfarmer : 10/18/2015 14:31
- RE: Okay Sat ,fishy and others with a bearish view - jpartner : 10/18/2015 14:34
- RE: Okay Sat ,fishy and others with a bearish view - packerfan : 10/18/2015 14:37
- RE: Okay Sat ,fishy and others with a bearish view - Clay hill : 10/18/2015 14:58
- RE: Okay Sat ,fishy and others with a bearish view - buckeye : 10/18/2015 15:42
- RE: Okay Sat ,fishy and others with a bearish view - steelguitar : 10/18/2015 16:21
- RE: Okay Sat ,fishy and others with a bearish view - IN555 : 10/18/2015 16:36
- RE: Okay Sat ,fishy and others with a bearish view - puff33m : 10/18/2015 22:24
- Hey JC I will give you my thoughts on forward Pricing - Tara Farms : 10/18/2015 23:50
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Okay Sat ,fishy and others with a bearish view
