Soybean price drop

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Son of Butch
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Soybean price drop

Postby Son of Butch » Wed Jun 20, 2018 5:22 pm

July 2018 Soybean contracts dipped to 8.41 bushel the lowest price since Dec 2008..... 9.5 years ago.
Last year soybeans bottomed at 9.04 on June 17 and recovered to peak for the year at 10.09 on July 17
In 2016 soybeans peaked at 11.64 on June 27th the highest price in the last 3 years.
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Re: Soybean price drop

Postby bball » Wed Jun 20, 2018 5:35 pm

I listen to the ag reports on the radio daily. Been following this pretty closely. Wondering if this is part of a 'teardown' process, in order to restructure our agrinomics? Not intentionally, but just a consequence of attempting to change the way we do things globally. I know my neighbors are sweating putty balls.
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Re: Soybean price drop

Postby sim.-ang.king » Wed Jun 20, 2018 6:37 pm

I can remember when they were $4, also remember selling 5000 bushels for $15.82, not that long ago.
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Re: Soybean price drop

Postby Stocker Steve » Wed Jun 20, 2018 11:13 pm

bball wrote:I listen to the ag reports on the radio daily. Been following this pretty closely. Wondering if this is part of a 'teardown' process, in order to restructure our agrinomics?


I pre sold 80% of my beans, but the price drop in corn and beans could cost someone 10s of billions of U$S...

Any idea why meat was not greatly effected?
Do you think the Chinese are feeling bad that they can now buy grain for alot less?
Is anyone here ready to catch the falling knife, or are the Chinese getting most of the panic selling benifit?
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Re: Soybean price drop

Postby bball » Thu Jun 21, 2018 2:40 am

Stocker Steve wrote:
bball wrote:I listen to the ag reports on the radio daily. Been following this pretty closely. Wondering if this is part of a 'teardown' process, in order to restructure our agrinomics?


I pre sold 80% of my beans, but the price drop in corn and beans could cost someone 10s of billions of U$S...

Any idea why meat was not greatly effected?
Do you think the Chinese are feeling bad that they can now buy grain for alot less?
Is anyone here ready to catch the falling knife, or are the Chinese getting most of the panic selling benifit?


That's what puzzles me, why the meat market hasn't been significantly impacted. I honestly can't figure out why. Just small fluctuations..for now.
I think the Chinese are really cleaning up (short term??) I don't believe anyone is ready to grab the knife....just yet. The crops look fantastic here. I haven't heard any reports on Nebraska, Illinois, Iowa, Ohio crops yet. Another bumper year going to keep prices in the basement, if weather holds and disease stays at bay.

Pre selling may be a genius move. The outfit that purchased on the other hand... will be interesting to see how this plays out.
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Re: Soybean price drop

Postby Son of Butch » Thu Jun 21, 2018 5:37 am

sim.-ang.king wrote:I can remember when they were $4, also remember selling 5000 bushels for $15.82, not that long ago.

$15.82 beans was back in 2012.... 6 years ago
The last time beans were $4.00 was 46 years ago December 1972
2001 they ranged from $4.24 - 4.95..... 17 years ago
40 years ago June beans were 6.77 and 6.76 off the field in the fall of 1978
20 years ago June beans were 6.13
5 years ago June beans 15.14
Last year 9.39

It's been 4 months since beans were at/over breakeven and all the projections are trending downwards.
Last month neighbor was angry saying I'm Not going to sell my beans for $9..... unfortunately he might be right.
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Re: Soybean price drop

Postby Stocker Steve » Thu Jun 21, 2018 7:10 am

Traders make money on volatility. Price direction does not matter much. After grain market exhausts itself they may go after meat. "Grain Marketing is Simple" by Ed Usset.

Forage pencils out much better for me than grain. Land is still selling here but poorer ground is getting difficult to rent out. Could be more CRP in our future.
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Re: Soybean price drop

Postby sim.-ang.king » Thu Jun 21, 2018 9:34 am

Son of Butch wrote:
sim.-ang.king wrote:I can remember when they were $4, also remember selling 5000 bushels for $15.82, not that long ago.

$15.82 beans was back in 2012.... 6 years ago
The last time beans were $4.00 was 46 years ago December 1972
2001 they ranged from $4.24 - 4.95..... 17 years ago
40 years ago June beans were 6.77 and 6.76 off the field in the fall of 1978
20 years ago June beans were 6.13
5 years ago June beans 15.14
Last year 9.39

It's been 4 months since beans were at/over breakeven and all the projections are trending downwards.
Last month neighbor was angry saying I'm Not going to sell my beans for $9..... unfortunately he might be right.

If "farmers" can't breakeven at 8.50 beans, then they need to break out their pencil more often, or maybe find another hobby.
This is just like when no one could survive corn going below $6, yet here we are still planting corn for less than $6.
Maybe the government will step in and save us all.
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Re: Soybean price drop

Postby Son of Butch » Thu Jun 21, 2018 1:02 pm

sim.-ang.king wrote:If "farmers" can't breakeven at 8.50 beans, then they need to break out their pencil more often,
or maybe find another hobby.

With Non-Land expenses averaging $295 acre and 52 bushel yield
(52 bushels is the Record High national average set in 2016)
$295 + 180 rent = 475 divided by 52 bu = 9.13 breakeven
How much profit is there when beans average a nickel over breakeven?
190 acres x 52.6 bushels = 10,000 bushels x .05 = $500 year

IF your land rent is $230 acre then breakeven = 10.09 bu
Land rent has to be under $150 acre for 52 bushel beans to = 8.50

In 1972 when beans were $4.00 bu minimum wage was $1.60 hr
1978 minimum wage was 2.65 hr and beans were over $6
2018 and most states are well over $8.50 hr minimum wage

Even now many cattle forum members refer to full time farmers as having a hobby and complain that people don't
tip 15-20% to their wives and children working in restaurants for minimum wage.

We've become a nation of burger flippers.
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Re: Soybean price drop

Postby sim.-ang.king » Thu Jun 21, 2018 2:22 pm

Son of Butch wrote:
sim.-ang.king wrote:If "farmers" can't breakeven at 8.50 beans, then they need to break out their pencil more often,
or maybe find another hobby.

With Non-Land expenses averaging $295 acre and 52 bushel yield
(52 bushels is the Record High national average set in 2016)
$295 + 180 rent = 475 divided by 52 bu = 9.13 breakeven
How much profit is there when beans average a nickel over breakeven?
190 acres x 52.6 bushels = 10,000 bushels x .05 = $500 year

IF your land rent is $230 acre then breakeven = 10.09 bu
Land rent has to be under $150 acre for 52 bushel beans to = 8.50

In 1972 when beans were $4.00 bu minimum wage was $1.60 hr
1978 minimum wage was 2.65 hr and beans were over $6
2018 and most states are well over $8.50 hr minimum wage

Even now many cattle forum members refer to full time farmers as having a hobby and complain that people don't
tip 15-20% to their wives and children working in restaurants for minimum wage.

We've become a nation of burger flippers.


Maybe the problem isn't the price, but rather the renter paying $230, and the guy spending $295+ just to plant them. Considering the fact that input cost for beans has increased faster than yields have, why would some pay those prices?

Well...
...the ever expanding Big farm mentality is the main culprit for farmers not being able to break even.
They pay more and more for rent and land purchase for fear of not purchasing it, and then someone else buying it.
The government and banks also egg them on to take more of that "free" money, and then put themselves into a position were they can't survive if the price goes down.
The seed companies, and chemical companies have also caught on to this. They have found that farmers are forced to pay their prices, because if they don't planting anything, they will go under.
We were paying $25 a bushel for round up beans, you pay now $50 for 50 pounds, or less pounds, for a bean that doesn't yield 41% more.
Go figure...
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Re: Soybean price drop

Postby Son of Butch » Thu Jun 21, 2018 5:15 pm

sim.-ang.king wrote:
Son of Butch wrote:
sim.-ang.king wrote:If "farmers" can't breakeven at 8.50 beans, then they need to break out their pencil more often,
or maybe find another hobby.

With Non-Land expenses averaging $295 acre and 52 bushel yield

$295 + 180 rent = 475 divided by 52 bu = 9.13 breakeven

Land rent has to be under $150 acre for 52 bushel beans to = 8.50

In 1972 when beans were $4.00 bu minimum wage was $1.60 hr
1978 minimum wage was 2.65 hr and beans were over $6
2018 and most states are well over $8.50 hr minimum wage


Maybe the problem isn't the price, but rather the renter paying $230, and the guy spending $295+ just to plant them.

$295 is not just to plant them... it's seed, tillage, planting, fuel, fertilizer, herbicide, insecticides, insurance, harvesting, operating loan interest, interest on equipment, equipment repair, storage, trucking and on and on.

$180 land rent is not $230 acre rent and $180 acre breakeven = 9.13
local cash bids today were 8.20 - 8.38

9.13 - 8.38 = 75 cent loss or minus $7,500 on 10k bu
price has to go up a $1 to 9.38 (and probably won't) just to make 25 cents
190 acres = 10,000 bu x .25 = $2,500 (pre tax)
950 acres = 50,000 bu x .25 = $12,500 (pre tax)

Makes a below minimum wage job look good.
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Re: Soybean price drop

Postby True Grit Farms » Thu Jun 21, 2018 6:01 pm

You got to be a dang fool to farm just to lose money. I refuse to work for nothing, but I don't try to keep up with the Jone's either. A payments on a new tractor and combine is unaffordable, but I see them in the fields everywhere.
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Re: Soybean price drop

Postby Stocker Steve » Fri Jun 22, 2018 6:39 am

True Grit Farms wrote:I refuse to work for nothing, but I don't try to keep up with the Jone's either. A payments on a new tractor and combine is unaffordable, but I see them in the fields everywhere.


Obviously folks have been overpaying for rent on not high productivity ground. I pass on rental offers for that kind of ground every spring. For several years I have heard renters say one more time...

But is rents are too high then what about land prices? In theory - - land prices will drop as T bill interest goes up, but we don't have that kind of investors in this area. Land is slowly appreciating here and selling to local folks who buy it because they can.
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Re: Soybean price drop

Postby True Grit Farms » Fri Jun 22, 2018 7:21 am

Stocker Steve wrote:
True Grit Farms wrote:I refuse to work for nothing, but I don't try to keep up with the Jone's either. A payments on a new tractor and combine is unaffordable, but I see them in the fields everywhere.


Obviously folks have been overpaying for rent on not high productivity ground. I pass on rental offers for that kind of ground every spring. For several years I have heard renters say one more time...

But is rents are too high then what about land prices? In theory - - land prices will drop as T bill interest goes up, but we don't have that kind of investors in this area. Land is slowly appreciating here and selling to local folks who buy it because they can.

Farm land has been going up around us and I can't understand why? My theory is money, I know my property taxes go up every year. I can't imagine that the government has control over the real estate markets, well maybe I can. I let my rental hay property go this year, I'm not going to work for practice.
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Re: Soybean price drop

Postby TennesseeTuxedo » Fri Jun 22, 2018 7:29 am

I hope the government comes up with a bailout program for farmers since the government created the problem with this tariff business.
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