How about a thread about marketing? - Page 2 - The Combine Forum
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post #11 of 116 (permalink) Old 03-16-2018, 02:27 AM
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I personally am a small farmer and will not contract what is not i a bin. I have plenty of small bins and most of my 2017 wheat got mixed with a bit of 2016 wheat is still binn'd and I'm sitting on my 2017 canola waiting for $12....... and waiting, and waiting....


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post #12 of 116 (permalink) Old 03-16-2018, 02:40 AM
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. Around here one elevator is pushing futures-first contracts and that worked for a couple of years(on wheat in particular), but lately they don't seem to get to agressive on basis...I guess they have you so what can you do? I felt from the start this may have been a trap, just took them a couple years to set the trap! So for this reason(and others) I am looking at getting a hedge account going again and doing my own risk management that keeps me open on who I can haul to. Something we used to do but it takes time and capital to manage. Might be worth it again.

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I think the futures only work best if uptake in a given area is low, so they cant screw around with basis too much. that being said I like them better than basis only.... with futures you have locked in give or take 90% of the crops value and only are exposed to fluctuations on 10 %, we got absolutely pasted on Nexera canola several yrs ago bc the "premium" was just a good basis contract. price tanked close to delivery date and grain still had to go in. rolled it into an even worse market watched things get even worse. finally delivered about 2 weeks bf market rallied to avoid another roll. if no basis contract could have delivered earlier or later.......


I might have this wrong bc its been a few years, but it was once explained to me that if I had a hedgeing account I could sell wheat / canola futures and hold until close to delivery, and then shop around for best basis and then swap an elevator's buy futures. it think it was called an EFP contract.

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post #13 of 116 (permalink) Old 03-16-2018, 06:43 AM
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I also am in a high risk area and depending on the year I will presell at least 50% of my expected gains, if the price is high enough. On some of my HR wheat last year I pre-sold almost 90% of projected yield but I figured I couldn't lose as the price was $8.50 (I missed the $9.00/bu contract by a couple days). That has paid off very well. If the price isn't great I might only presell 20-30% or none.

I am all sold out of canola now. I sold the majority at 11.50 and then the rest at 11.75. I thought about waiting for 12 but then my brain and years of bad experience told me, "how many times in your life have you sold canola for 11.50 or over and how often have you sold canola for under 10". It was kind of like when canola went to over$16 a few years ago, I pre-sold some but I heard of fellows waiting for 18...????

Malt barley, still waiting for delivery....go figure.

I look at marketing this way....farming is really one of the riskiest business's you can be in so I may as well have some marketing risk involved as well....as other have said, everybody's situation is different and depending on your cash flow etc...that will dictate how much risk a person takes.
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post #14 of 116 (permalink) Old 03-16-2018, 07:57 AM
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... I am not sure anyone makes money other than the people who sell the options.
Over 75% of options expire worthless. Yes the sellers are the ones who make the money.

Which is also why there are restrictions who is allowed to sell options.
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post #15 of 116 (permalink) Old 03-16-2018, 09:08 AM
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Some years I have a HTA contract off the field. Depending where price is, I’ll contract 50-80%. Other years it’s cash at harvest. As I’ve gotten further into my farming career and built up funds I store more and wait until a production scare and market either cash or hta.
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post #16 of 116 (permalink) Old 03-16-2018, 09:44 AM
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I like this thread.
What’s everyone think of a giant canola crop in western Canada? I’m putting what should be pea ground into canola because of the pea market issues.
Now I’m worried that there will be a large canola crop from everyone else doing taking some of thier pea acres and changing to canola.
But on the other hand now China is threatening to stop buying American soybeans we might se a big demand for canola to make some of that up? But then again American beans will tank and the rest of the world not in a trade war with them will scoop up the cheap beans leaving our canola out in the cold? I’m 30% sold on canola at a reasonable price for this area and I’m thinking about going higher which is not something we normally do this time of year but I’m thinking of stretching to 40-50%

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post #17 of 116 (permalink) Old 03-16-2018, 10:21 AM
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I like this thread.
Whats everyone think of a giant canola crop in western Canada? Im putting what should be pea ground into canola because of the pea market issues.
Now Im worried that there will be a large canola crop from everyone else doing taking some of thier pea acres and changing to canola.
But on the other hand now China is threatening to stop buying American soybeans we might se a big demand for canola to make some of that up? But then again American beans will tank and the rest of the world not in a trade war with them will scoop up the cheap beans leaving our canola out in the cold? Im 30% sold on canola at a reasonable price for this area and Im thinking about going higher which is not something we normally do this time of year but Im thinking of stretching to 40-50%

this maybe sounds nuts but actually if worrying about china restricting soy imports, peas would be the better bet - soy goes into China primarily as a protein source not for the oil....... Not saying that will happen, but if you are planning acres on that issue in a vacuum, I am pretty sure that canola meal isn't a particularly good soy meal substitute, especially for pork.
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post #18 of 116 (permalink) Old 03-16-2018, 10:23 AM
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I like this thread.
Whats everyone think of a giant canola crop in western Canada? Im putting what should be pea ground into canola because of the pea market issues.
Now Im worried that there will be a large canola crop from everyone else doing taking some of thier pea acres and changing to canola.
I get a newsletter and they conduct surveys of their farmer readers from time-to-time. They just did one and the results showed canola acres flat. Spring wheat, durum and mustard showed a big increase. This may be due to typical pulse areas going to other drought-resistant crops? I bet Manitoba has less soybeans and more canola in a typical over-reaction to last years dry summer and lower soybean yields. That could negatively affect our awesome basis levels in Eastern MB and make $12 harder to get...

One additional comment about marketing: It affects the biggest number on the balance sheet which is the gross income. Sometimes we spend a lot of time on little things that are fairly inconsequential in the grand scheme of things and ignore marketing.
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post #19 of 116 (permalink) Old 03-16-2018, 12:05 PM Thread Starter
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One additional comment about marketing: It affects the biggest number on the balance sheet which is the gross income. Sometimes we spend a lot of time on little things that are fairly inconsequential in the grand scheme of things and ignore marketing.
Exactly. How many threads are there on here about the minutiae details of crop production or equipment choices amounting to pennies per acre, and rarely a post on marketing. The low to high swings even within a boring flat marketing year can easily be 25%, when profit margins are in single digit percentages(or less). 25% change in gross income is massive. Compared to (for example) a fungicide application which is debated endlessly, and may have a 50% chance of a 5% yield increase( to pull numbers out of thin air). Which deserves more attention?
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post #20 of 116 (permalink) Old 03-16-2018, 12:13 PM
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Exactly. How many threads are there on here about the minutiae details of crop production or equipment choices amounting to pennies per acre, and rarely a post on marketing.
Because, nobody, for any length of time can master marketing, no matter how long studied nor practised.

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