Sep 2, 2014
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January 2014 Archive for Trade the Farm

RSS By: Thomas Grisafi, AgWeb.com

We trade what you grow!

 

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

 

 

High Anxiety

Jan 23, 2014

As most of you know, I recently opened an office in Independence Iowa so Trade the Farm can help serve our farmer clients in a place closer to home.  We just hosted a marketing meeting last week with farm groups, grain seed dealers, fertilizer companies and grain elevators.  At this meeting I noticed many of our farmers are getting more interested in the futures market again, here’s why.

Most farmers are committed to growing in 2014.  An average Iowa farmer will spend $800-900/acre to put in his crop.  At our current corn price of $4.25, having a good yield of 200 bushels an acre will not even cover total input costs, much less any other unforeseen disasters that always seem to crop up.  This makes farmers very anxious, as it should.  We all know that crop insurance rates will be set in February and with the price of corn and beans trending down because of rains in South America the outlook dims further.

This is the first year in a long time where the question isn’t how much money am I going to make growing corn, but CAN I make money growing corn?  Our young farmers who don’t own their land are probably looking at the biggest risk especially with land, seed and machinery prices at record highs.

This is why farmers need our help.  Most farmers know that bad things can and do happen and are probably prepared for a bad year.  But what if we have low corn prices for not just one year, but three? 

Can you, the farmer, make money selling $4 corn? Corn at $3.50.

Let me know what you think.  Call 1-855-737-FARM. Tweet me @tradethefarm.

We have new software that can help you manage your margins.

 

 

 

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

 

 

 

 

#It's Only Iowa

Jan 17, 2014

As  I was driving through Iowa this week to our office in Independence, I couldn’t help but think back to this summer when #itsonlyiowa was trending on Twitter.  As I’m sure most of you know, Iowa was hit with two curveballs this year with prevent planting and bad weather.  Many farmers used #itsonlyiowa to gripe about conditions, how low the price of corn was and whatever was bothering them that day.

These farmers are part of the reason I opened an office there.  Why Iowa?  Because the Iowan farmers forgot to sell their crop.  Iowa is the leading producer of corn, soybeans and pork, and historically the better corn grew in Iowa, the lower the price got in the market, but not this year.

Iowan farmers were looking at their crops and weren’t too worried.  They figured if their crops weren’t that great, no one else’s were either.    But all those other neighboring states managed to pull in near record crops.  Meanwhile Iowa farmers have a lot of corn sitting in silos at a deferred price while the price of corn keeps edging lower.  I love our farmers in Iowa, but they need our help.  We want to help teach some marketing to a crowd that forgot to sell its crop.

Margins, markets, whatever your needs, at Trade the Farm we’re only a phone call away 1-855-737-FARM, or if you don’t have much time @tradethefarm works too.

Enjoy your weekend.

 

 

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

 

 

Prayers to the Market

Jan 11, 2014

Prayers to the Market

 

Ahhhhh Sunday.  On Sundays we here at Trade the Farm @tradethefarm have three very important obligations: spend time with family, go to church, and get ready for the markets to open. 

Some Sundays in church I find myself thinking about a certain large short future position and praying that prices will go down.  Then I look around and see all the farmers in my congregation and I’m pretty sure that they’re praying that the prices will go up.

Sunday has always been considered a day of rest and while a lot of people take that day off, anyone in the ag- business knows that Sunday in America is Monday to the rest of the world.

Between a Friday afternoon close and a Sunday night open the market has its quietest time of the week, over 50 hours closed.  That’s why Sunday can have some of the best trading of the week.  Sunday is prime time for price discovery.  Over those 50 hours there can be changes in weather, crop conditions, geopolitics, etc.  In that same time your thoughts about the market and risk have also had time to settle in and coalesce.

CME Group, unlike Chick-Fil-A is always open on Sundays.

My Sundays are usually spent preparing for a conference call named Ag-Squawk @agsquawk, where ag-professionals and I get together to evaluate risks and possible opportunities for the following week.

At Trade the Farm @tradethefarm we always preach to our farmer clients that you don’t make money growing grain, you make money selling the grain you’ve grown.

With that said, time to get to work. 

Whose prayers are going to be answered, mine or yours?   Only God knows.

I hope you and your family are enjoying this Sunday as much as I am mine.

Feel free to contact me at any time 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

 

Unlimited Opportunites

Jan 10, 2014

Unlimited Opportunities

 

Corn hit a new multi-year low in 2013, and after noted farmer sell off over the last few weeks, here comes the infamous January crop report.  This report never seems to come quietly. Five out of the last six January crop reports have seen limit up or limit down moves.  With corns new lower price structure we didn’t have a limit up move, but percentage wise, it knocked our socks off.

So as a farmer what’s one to think? Everyone ran to options to ease their minds by buying puts, but the real heroes were the calls who everyone thought were dead.  With wild markets like we saw today it’s essential to have a better understanding of futures and options markets. There are so many different ways to educate yourself and to monitor your risk. We here at Trade the Farm are always here to help farmers understand and manage these risks. 

I often joke on twitter @tradethefarm, that the American farmer is caught long.  Well tonight these American farmers can sit back, relax, and have a drink, because it certainly looks like this cat does have nine lives.

Please feel free to contact us at any time 1-855-737-FARM.

The New Normal?

Jan 06, 2014

$3.99 Corn…..the new normal?

 

After a weak close on Monday with December corn trading at $4.50 and November beans at $11.35, what will 2014 bring?

We here at Trade the Farm are sharpening our pencils, pulling out our chairs and settling in to retool our profit margins for what is looking to be a challenging year.  All the old tricks we’ve used in the last 6-7 years aren’t going to work in this new corn market.

Corn prices plunged 39% in 2013 because of low demand and high supply.  These trends look to continue in the first part of the new year, and possibly all year.  A crop report coming next week should help to sharpen things up a bit.

Don’t you miss $8.00 corn? I sure do.

What do you think 2014 has in store for us? Let me know on Twitter @tradethefarm.

Trade the Farm would like to wish you and yours a very happy, healthy and prosperous new year.  We look forward to continuing this and other conversations in 2014.

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