Aug 23, 2014
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Trade the Farm

RSS By: Thomas Grisafi, AgWeb.com

We trade what you grow!

 

Back to Basis

Mar 07, 2014

Earlier this week I was on US Farm Report with Tyne Morgan and the whole show seemed to be about the surge in corn, beans and wheat prices.  Most of these commodities are marking record highs of the past 6 months.  These giant rallies have given the American farmer a great selling opportunity……or have they?

Let’s go back to basics, literally, the basis. 

In 1989 I went on a high school field trip to visit the Chicago Board of Trade.  The energy, passion and intensity grabbed me and I was a goner from then on.  In my 25 years in this industry I have never, not once, seen a grain truck making deliveries on LaSalle Street.  That is because price is discovered at CBOT/CME, but you sell your grain in your backyard.

And our basis is falling apart.  Think back to a couple of months ago when corn was around $4, your local basis was probably twenty cents under CBOT.  Now when we are close to $5 corn I bet your basis is running forty cents under CBOT.

Check your own local basis, you’ll probably find that they have softened anywhere from five to twenty five cents in the last week alone.

Tell me what you think, where’s your basis? Contact me at 855-737-FARM or anytime on Twitter @tradethefarm

 

 

 

 

 

 

 

 

There is a significant risk of loss in trading futures and options.  Futures trading is not appropriate for all investors.  Please read our full risk disclosure atwww.tradethefarm.com

 

A Caffeinated Rally

Feb 20, 2014

Over the last few days coffee and natural gas have rallied about 12%. For a little perspective, if this were to happen in corn or beans we would be limit up for a couple of days at least.

This rally is occurring because of political unrest in the Ukraine and Venezuela, and also because of adverse weather in South America.   The price of coffee has been very volatile this year, and has gone up 40% thanks to a severe South American drought.  Luckily for us, grains seem to have caught this wave.

With no change in fundamentals, all the smart people here at Trade the Farm predict a gradual ebb back to prior levels.  But for now we, and all of our great farmers are very grateful to be up here. These levels offer a great pricing opportunity.  As you have heard me say time and time again, our farmers aren’t paid to grow their grain, they’re paid to sell the grain they’ve grown.

 

 

 

 

 

There is a significant risk of loss in trading futures and options.  Futures trading is not appropriate for all investors.  Please read our full risk disclosure at www.tradethefarm.com

 

 

We Hear You

Feb 12, 2014

I’ve spent much of the last month traveling around Iowa and Illinois meeting with producers and educating them on margins and markets in this challenging agricultural climate.

I’ve come away from all of this hearing many recurring themes:  I should have sold more of my corn last year, I wish I knew more about options, and the always perennial, I should have listened to my wife.

Trade the Farm isn’t here to tell you what you should’ve done, we’re here to help you figure out what you can do now.  We understand your frustration and your anxiety, and we’re here to help show you what you can do about it.

The only way to make the most money farming is to truly understand your cost production and your margins.  We specialize in that and we have some amazing "decision making tools" that are an easy and quick way to help you maximize, understand and analyze your profits.

We’re here to help you be a better marketer of what you are growing. 

I like to challenge my farmers to spend as much time at their desk as they do in their fields.  The most elite farmers in this country barely spend any time in the field anymore; they are at their desk, which is where the money is made.

I will be doing some more traveling this coming week, to Iowa, Illinois, South and North Dakota.  I would love to hear from any of you farmers out there.  Give me a call, let me come and see you. 1-855-737-FARM.  Sometimes the hardest thing to do is to ask for help.

We hear you, I hear you, and I’ll see you soon.

 

 

 

 

 

There is a significant risk of loss in trading futures and options.  Futures trading is not appropriate for all investors.  Please read our full risk disclosure at www.tradethefarm.com

 

Top Producer 2014

Jan 31, 2014

As most of you know the Top Producer seminar was here in Chicago this week. What a fine event.  There is nothing like meeting and listening to some of the best and brightest farmers in America.   I had the pleasure of being asked to speak to the crowd at Tomorrows Top Producer which focuses on younger farmers and ag professionals, about trading crops around USDA reports.

While this is always an amazing event, this year’s seminar seemed to have a more somber mood than in past years.  Mike Boehlje from Purdue University gave a great talk about managing and understanding your costs, and making this your top priority every day.  Chris Barron also gave a talk about a new way to manage your costs with his Profit Manager.

If you couldn’t make the trip to this beautiful city you are in luck as the great folks at Top Producer have uploaded all of this content here.

Many guests visited the trading floors and I escorted some myself.  No one could believe how the once mighty corn futures pit has now been reduced to about five guys standing around with their computers.

How did this happen?

Times change, technology changes, and we in farming and ag need to change with it.  Most of those traders who used to stand in the corn futures pit screaming and pushing are still trading, they’re just doing it in an office, or from home.  High frequency trading revolutionized our futures market at the CME Group, and the good traders, the ones who change with the technology, are still trading.

So what are our good farmers doing?  You tell me. What have you been changing to help manage lower corn prices?  How do you not spend too much without sacrificing yield?

Call me 1-855-737-FARM, tweet me @tradethefarm.

I’d love to hear from you.

And as always a very big thank you to all the speakers and guests at Top Producer, I’m always pleasantly surprised at how much I learn every year, and how unique each individual farm can be.

 

 

 

 

 

 

There is a significant risk of loss in trading futures and options.  Futures trading is not appropriate for all investors.  Please read our full risk disclosure at www.tradethefarm.com

Fuming Over Gas

Jan 27, 2014

With January shaping up to be the coldest month of the century so far, farmers are hit once again with uncertainties.  Uncertainties like:  Am I going to have enough propane to keep my turkeys and hogs warm?  Or to sanitize my milking equipment?  Can I get my propane? And how much will I have to pay for it?

Because of the frigid, record breaking temperatures covering much of the growing area propane has seen some crazy price increases in the last few days.  The price went from $1 to $5 and this has propane companies adjusting their prices twice daily.

Part of this shortage is not only due to cold weather but to an unusually wet harvesting season which had farmers using a lot of propane to dry their corn crops prior to storage.

It’s hard to believe in 2014 that once again the American farmer might just be left out in the cold.

 

Thoughts?  Questions? Want to complain?  Shoot me a tweet @tradethefarm, or just call 1-855-737-FARM.

 

 

 

 

There is a significant risk of loss in trading futures and options.  Futures trading is not appropriate for all investors.  Please read our full risk disclosure at www.tradethefarm.com

 

 

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