Chip's Chore Time
Chore time for me isn't what it used to be when I was growing up on our eastern Iowa farm. In fact... I don't even have horse chores to do any more!
Wow... what a wind!
Oct 27, 2008
Chore time for me isn't what it used to be when I was growing up on our eastern Iowa farm, but taking care of two horses in the morning before I head in for work gives me a little time to think about the day ahead. Each morning, stop at this spot to get a feeling for the "tone of the day" - and some attitude about agriculture and the markets.
I was thinking…
... wow... that was some wind Oct. 26, wasn't it? It blew into the Midwest along with a cold front that brought the first snowflakes of the season with it. With all the corn still in the field, it felt strange to see some snowflakes flying with all the corn leaves also blowing around. There was some wind damage to the corn crop, but it stood up surprisingly well.
Corn yields are also still holding up... there hasn't been a lot of the late-planted corn harvested yet, but it will start to roll into the bin (by way of the drier) very soon. It looks like the early yield checks on the late-planted corn are -- as with the early planted corn -- above what most growers expected.
All the standing corn in Iowa made it pretty tough on this ol' pheasant hunter for Iowa's opener! But, many growers are rolling the dice on this year's corn crop and letting it stand in the field hoping to get a few more points of moisture out of it before rolling combines.
Don't forget about the marketing loan program...
Even though corn, soybean and wheat prices are still well above levels that would trigger a loan deficiency payment (LDP), that doesn't mean you should forget all about the marketing loan program. If you're looking for cash to finance 2009 production, the marketing loan program is a source of "cheap" money (3% in October) and it "buys" you some time for the markets to recover later this year and into 2009 as demand starts to come back to the market. I know this seems like an obvious source of funding, but some people I've talked with about the credit crunch seemed to have forgotten about the marketing loan program as a source of cash flow.
Have corn and soybean prices bottomed?
Without a doubt, that's the number one question I'm getting right now. Every now and then, the grain markets trade like they're actually looking at the fundamentals at play instead of just focusing on crude oil, the U.S. dollar and equity trade. That's a good sign for a return of stability to the market. But, chart formations (technical indicators) still haven't improved. In fact, the triangle formation in November soybeans is setting that market up for a major move. To make it a major up move, Nov. futures have to close above $9.50. To make it a major down move, Nov. futures have to close below $8.45. I know... that's a wide range -- but that's a symptom of the extreme volatility in all the markets. To trigger any technically based trade, markets must move significantly.
So... have the markets bottomed? They're working on it... but don't be surprised by one more spike of October lows before value-based buying really starts to drive prices back to the upside.
Have you decided who you'll vote for?
I'm not about to tell you to vote for McCain or Obama... but I've made up my mind. A couple weeks ago, we asked the Obama and McCain camps for answer to some of our comments and we ran their responses in Pro Farmer newsletter. If you'd like to see their comments, click here to send us a note and we'll be sure to get the two pages of the newsletter out to you. Oh... and you'll also get some information on how to get your Pro Farmer membership started.