Corn harvest update

Our corn is probably a couple weeks out from getting picked. We got the dryer and augers set up and tested tonight. It is nice to have it sitting there if the weather turns nasty.

The corn looks great, I would expect well over 200 BPA, too bad it is not worth much.

Good to hear you are ready to go!

I have not gotten ready for soybeans yet. I guess I should this week. I still have green pods in the fields. I finished planting on June 30th.

I heard stories about a guy over here who forward contracted a portion for 2014 in 2012 for $5.95 a bushel. People said he was crazy. I guess I was the crazy one not to do the same! This will be the second year in a row he will get high yields and high prices.

We have some of the corn contracted at $4.50, but not enough of it, we are hoping to average about $3.50. We got burnt the year before by being short on contracts.

Having never done any contracts, how does it work if you are short?

Do you store a lot on the farm? That is my next step. I am going to visit an equipment dealer who installs complete grain handling systems to get something set-up to be able to carry corn from fall until the barge loading starts in February.

John: Purchase contracts are just that. The purchaser agrees to pay so much for so many bushels of grain. IF your short you have to "buy" grain at the current market price to "fill" the contract. This is done on "paper" you do not have to go "buy" grain and deliver it. You may have to pay a handling fee but most contracts are closed out this way. Even if you deliver your contracts there will be a settlement on any bushels over or below the contracted bushels. So if you sold 1000 bushels and delivered 1010 bushels the extra would sale at current market price. Same way for a shortage too. As you deliver 950 bushels on the contract. Your not going to end a semi load down to just sell 50 bushels. They would buy the grain on paper and charge you a fee for the few bushels your short.

So if your selling price is below the current market and you do not have the bushels to sell, you would be paying the difference to buy enough grain to fill your contracts.

I use purchase contracts a lot. I try to have 80% or more of my grain priced before harvest. I also lock in my inputs as much as possible too.

I currently have cash grain contracts out two more years. I have Dec. 2014 contracts that are WELL above current market price. I never try for home runs. I try to lock in a profit whenever the prices allow me too. My contracts look like home runs compared to current cash grains prices but if you look at the cost of production they are just profitable.

The biggest thing to remember on cash grain contracts is to ALWAYS have the grain to fill them. Even if your under current market but contracted above your cost of production you will not lose money. You may have lost an opportunity for a higher profit but you will still always make money.

So if you produce 50,000 bushels of corn don't go out and contract a 100,000 bushels of corn. Guys try this when they are just "sure" that their contract price is well above market. This speculation sinks most of those that try it.

I see to many guys set around without any type of marketing plan other than waiting and hopping. That costs them money year end and year out.

They will not contract any because the market is not at the 10 year high. So they pass up good profits for the hope of sky high prices again.

This summer was an example of this. You could lock in $11-12 soybeans prices but guys still wanted that $14-15 price and road the market down to $9-10. So "hoping" for higher prices made them pass over a "good" price.

I looked at some the other day. Just going on 45 years of experience,I think it would crib alright if I had time to pick right now.
The guy that I get my fertilizer and chemicals from buys grain and farms about 4500 acres too. I saw one of his hired men at the lumber yard yesterday. He said they were shelling,but the moisture was running around 30.
He said the only reason they are running is to get as much of their own done first and get it out of the way before everybody else starts hauling it in.

I would comment on your statement concerning guys waiting to make moves by saying in a lot of the areas of the East that quite a few elevators have worts of some type. They are either lowballers, have trouble paying their agreements, or use dockage to cover bad contracts they made. Some of it is not their fault as small elevators (by mid-West standards) put out proportionately large contracts to end users and then do not get paid. I would love to have contracted 80 percent ahead this year but I can't afford to wait for the courts to get my money if somebody goes belly up. I have never been hurt by the dockage game but I have heard of guys a year ago that were bringing in beans contracted at 15 dollars that normally would not have dockage issues get the better part of 2 dollars knocked off for various reasons plus the moisture thresh hold seems to be a moving target. I guess one of the blessings here in the East is our basis is stronger in a bumper crop as our supply lags demand.

(quoted from post at 22:52:31 10/22/14) Our corn is probably a couple weeks out from getting picked. We got the dryer and augers set up and tested tonight. It is nice to have it sitting there if the weather turns nasty.

The corn looks great, I would expect well over 200 BPA, too bad it is not worth much.

Click to expand...

There is corn around here still showing some green on the leaves. The cobs have only drooped to the 10 to 11 o'clock angle.
It's going to be late and a lot of drying for that field.