OT Grain prices

How come we can build and man a space station and still have to put up with the "fun" buyers on the grain board of trade. They are like the barn yard goose, they get up in a new world every day. Wheat was down on Monday, up on Tuesday, down on Wednesday and up 50 cents on Thursday. Makes no sense to me, how about you? Can anyone come up with a better way?

If everyone who bought grain had to physically take delivery before they could sell,there would be far less speculation.

Same way with all commodities. If someone wants to buy my grain they can tell me how much they will pay without checking with Chicago first.

If they need more they will bid up, if they don't need it they bid less instead those traders trying to set a price for everyone.

Actual buyers have there own bases anyway.

Gary

Here in Canada we have the Canadian Wheat Board which in a nutshell amounts to central desk selling and pooled pricing, also delivery restrictions. Anyway it's been around longer than I have, but now it seems that a growing number of producers don't want it. I like it, but I'm not farming 10,000 acres either.

And one other thing. Farmers buy and sell hay and straw without it being traded in Chicago.

We could do the same with grains.

Gary

I agree, one guy offered me $9 a bale large rounds, for my straw if he bales it, another guy offered me $25 a bale and he bales it, same size bale. Who do you think is gonna get the straw? My oats are 31.8 TW, 9.1 moisture, one feed mill said $3.00 bushel, but had to be 36 TW, another one told me $3.65 bushel, and 31.8 TW is fine bring them in if you want. I sold 100 bushel to a gal that has horses because she was paying $12 for 50# at one of the stated feedmills, She is gonna pay me $5 a bushel. Now I have to decide if I should just keep the rest of my oats and use it with distillers grains to feed out my steers, or save it for when I wean my beef calves. Hmmm.

Why not go one more step and completly take futures out the market.
If you sell you must have the product in hand and if you buy you better be ready to take delivery today.

I think I read that a Canadian wheat farmer was arrested (by Canadian authorities) for taking his wheat south of the border to sell it in the US for a higher price.

The futures market offers farmers a chance to engage in risk management. Any farmer who knows how to manage the markets by engaging in technical and fundamental analysis will pay off dividends in the long run. Eliminating the futures market would be a big no no, in my opinion.

I know that you folks in the U.S.A. trade grains by the bushell,here in eastern Canada,it is predicted to be worth as low as 135 per metric tonne (2200#'s/tonne).It was over 200 for quite awhile now,since late last fall anyways.Don't know how that converts to U.S. dollars per bushell.If I was a betting man,if the floods in the corn belts are as bad as they say they are,by December they will likely be as high or higher than ever,but who knows?

The modern commodity system came about as a way to level the markets and stop the railroad operators from basically stealing wheat in the high plains by offering about a fourth of what it was worth in Chigago or New York because they controlled the transportation. This day and age with a global trading system no indivdual could ever hope to keep informed well enough to set their own price if they had a large amount of grain to sell -- the 15-50 acre man still gets a premium in our area because of locality and convenience. I will pay extra to get my feed a ton at a time and when I need it.

physical delivery would take the GAMBLERS out of the commodities and fuel markets ,, FUTURES ARE GOOD TO HAVE AND A MUST FOR sane pricing , On the FLIP side , however Futures markets have become a playground for manipulators ,, where IS THE SECURITIES AND EXCHANGE COMMISSION ?

Canadian and US dollar are pretty close to even. The grains in the corn belt are all news hype. Did the news ever tell you what the planted acreage was to overall US production? NO. If the US was ramping up in corn production for ethanol, then how much more corn was planted? 50-100%? So if you lose part of this 50-100% then you haven't lost any production over last year. My guess is 1/2 of 1% loss. Some on here are farmers in that area and they lost parts of fields: to just getting the crop in late.


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The whiners have it WAAA

The purpose of the futures market is for "price discovery". The true role of the speculator is to accept the "risk" of either buying or selling the product from the producer. You think the market is going down, so you sell. He (the spec) thinks it's going up, so he buys it. Simple supply and demand. Farmers never complain when prices go up.....he's loving the spec's then. Only problem is, the farmers won't sell when the price is going up because they might leave something on the table. The Chicago Board of Trade is the greatest price discovery system in the world. Yes, it does have it's problems, but take it away..........then we WILL have something to complain about.

No farmer is forced to sell with a futures contract they can still harvest their grain and sell it to whoever they wish at least they can in the US.

If people are allowed to buy & sell what they want, we find the value of the item, and enough of the item to satisfy demand.

If the govt controls the price of something, we will end up with shortages (typically) or surpluses of things, and neither is a good thing.

If the govt controls the amount of a thing, then we will end up with very high or very low prices, typically on the high side.

Some of the most terrible years for farmers were when the govt encouraged huge expansion in grain production, followed by grain embargos to control the supply of grains. Our input costs still fluctuate, and will cripple us all - including those who think they are getting cheap food because of the govt controls.

The current system works the best. For the last 20 years we have had mostly cheap grain, and farmers barely make anything. No one was complaining then, as grains were priced too low....

Now, for 18 months, grain prices are up some, and it is some sort of national crisis. Huh? People stopped paying for grains what they were worth, so tree-huggers paid more for wildlife areas, others paid more for housing developments, roads, and grain production slowed down. No one cared, crops got too cheap, and farmers quit trying for record crops....

A real crisis would happen if the govt gets involved and tries to 'help' the situation.

Let a little bit of volitility happen, let the production match up with the demand, and all will work itself out just fine.

I'm in what is classified a near-drought area, I'm waiting for my fields to dry out so I can spray the aphids in my beans. Those buying & selling beans - what should they make of that situation? Too wet, too dry, too many bugs, too good or too poor bean crop????? They are real confused, and don't know what to make of the market or 2008 crop. Such big questions leads to prices see-sawing back & forth, until it sorts itself out.

Next spring, we will need to know if people want more beans or more corn or more wheat. If we do not allow the market to buy & sell those rumors, we will not know what crop to plant, and we very well could run out of one or the other. These big up & down markets are a part of the cure of tight grain supplies - they are not the problem.

If we think it's a problem & try to cure the market swings - _then_ we have a problem. What do you do when prices are controled by the govt, but we are out of soybeans???? No one will plant any more, because the govt has the price controlled. You go hungry..... Even tho bean prices are cheaper - you can't buy any cheap food, none left now.

Good deal huh?

Hey, rumor is that a huge chunk of soybeans got cought by a big investor group in a bad way, and the beans on-paper are getting sold off to change this company holdings around. This is really hammering bean prices, and dragging the rest down with it.

As fall comes, many feel we will have a much poorer crop of beans, and be short of them, so prices may likely spike right back up again. These lower prices are keeping buyers still buying beans, so the fall spike is more and more likely as the price drops now. It is an oppertunity for livestock growers to lock in a more sane price right now, and keep using all that corn & bean meal. Keep demand up, and we still have a very low carryout margin of both crops........

The rollercoaster should continue.....

--->Paul

It's not any good on a world market. Billion of Chinese put a lopsided strain on the system.
When the market controls were put on it was because of a combination of tractors and trains. With tractors the farmer could produce more and with the train he could get it to more lucrative markets. The problem was everybody shipped to the lucrative markets and then produced more and more because they made money, but the more they produced and sold the lower the price went because the market was flooded. The farmer was plowing more acreage and producing more, but only making as much as he did with his horse and plow.



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The whiners have it..WAAA

It seems to me when the market is fluctuating a lot,its like a signal to some hogs somewhere to get with the program and buy or sell maybe?I will say this,it has not anything to do with supply and demand,or much else,Thieves are going to steal it if they can,and if you made a living by doing that you would steal it too.Thats the very reason there needs to be limits,and enforcement.Crooked as people are nowdays they would break all the farmers and wonder why they were starving to death.Has nearly happened too.You want right thinking and good people to figure out how to intervene in it to stop this nonsense.
Ever since I was a kid,and before that Im sure,farmers have been being cheated,badly.Now to play along with the hogs,and say no to regulation is kind of dumb.I can see that with the way government messes most stuff up it does why people would think that it would be right to keep them out of it,because of their corruption,but the alternative has been to make big farmers,and way less farming.
If the prices dont ruin agriculture,a few years drouth,or anything,a bad disease,will devastate it.How many,especially big farmers,could survive if they loose one crop.Not many,and far less if they loose 2 or 3 crops.
The people running government right now are worthless.I dont know who we could find that could fix this problem about all this,should never have got to where it is.Should have already thrown a lot of these stupid ideas in the trash can,and fixed the situation to where we had family farms instead of ever bigger ones.This should have been done years ago.The CBOT should be history about 1970.So some people have gotten rich,so what.I would rather have the farmers.Farmers are worth just as much or more than any other professional,like lawyers,doctors,and they shouldnt have to farm a couple of counties to make enough money to live.

Its about the same for any working person,just barely get by mostly.What is so good about people who play with stock markets?Most of them dont know what they are doing,at least part of the time,no matter what they say,because its the insiders,the ones in the know who get rich(nnalert Clinton)and in order for that to happen,somebody gets poor,the poor working people.

If you were able to get a bunch of money,and not used to having it,you will be broke in a couple of years anyway.

If you want to be a stockbroker fine,but dont tell the poor working people and farmers that there doesnt need to be any regulation.What we get is chaos,which is what we have,it happened so slow you didnt notice maybe.Look around,its not even the same country it was once.Few even live in the country now.Small towns everywhere are suffering.I know farmers that plant grain and live in town,dont even grow livestock,no money in it.They might have a couple thousand acres of corn and beans.If it werent for ethanol,and the higher corn prices there would be lots less now.

What seems like has happened is the old more and more efficient farming deal has just run most of the farmers out of business.They cant afford to farm any more.

What farming needs is a fair pay finder.When its found,keep it that way.Use the government if it gets out of hand.

This stuff like it is,only is for the thieves and paper pushers.Maybe there needs to be a bunch of them speculaters hitched up with harness to a no till planter for a couple of years until the price of fuel gets reasonable?Then instead of Roundup,the speculaters can use a hoe to get the weeds out,or pull them for the ones who need the bending exercises.That might be a good time to get some hot shot practice.Just to see if it makes them mad,or makes them move.

If I was a farmer thats what I would like to see maybe.