What a sad tale. All that hype about corn and ethanol sucking farmers, both honest and greedy, into the go long corn camp. They ended up paying 2x as much for diesel, 3x as much for fertilizer (or more), and anywhere from 25% to 75% for everything else (equipment, seed, etc.) to obtain bumper corn yields per acre, and gave up on other, more stable crops, as they used nearly all or all their land for corn planting. And now they are going to crash and burn. Lesson for the day: Whether you're an equity trader or farmer, diversify your portfolio.
Some will crash and burn, but it will be weather related or very poor risk management. Producers have had every opporutnity in the world to protect excellent profits through insurance and all of the available marketing and risk management tools. Even with inputs rising like they have, record per acre net revenue can still be had. FYI-USDA says farmers have planted 6 million less corn acres this year vs. last year, and that number will likely grow as the impact of this spring's weather is assessed. Good farmers are not going to "crash and burn", one down day in corn futures doesn't change the fact we are going to be facing near impossible ending stocks levels for corn and beans both.
they aren't what because corn is down limit today you think that magically will erase the last 3 or 4 months of almost all positive price movement? You do realize that corn is at an all time high and that people were making money at 4 and 5 dollars a bushel right? Corn at 5.50 to 6.00 and it's still very profitable dumbass Go whine about speculators in the oil forums
there will be little or no harvest this year to sell,so if they sold futures to lock in a price against there commodity ,they have no commodity as a hedge
Most farmers use various forms of crop insurance rather than futures. Also the number of acres directly impacted by the flooding is a relatively small amount of the crop. A drought or freeze would be a MUCH more extensive disaster for producers. Even for those who've lost their crop due to flooding-knowing their acerage has tripled in value the past 2 years should provide great solace.
talked to youngtrader from iowa and he said when corn was planted that the ground was so saturated that the roots didn't have to go down in search of water so roots went sideways,if we get a drought in august the lack of deep roots will kill the corn,talked to a dow chemical salesman about potash,he's manager of 3 midwest states,he said that the farmers have to have excellent credit to get seed,fertilizer and so on, and he said most of them don't have that,so weak credit,bad crops,flloods,tanking beef prices,i don't see how they will come out ahead,most farmers are rich in land on paper,and scrape by from year to year surviving on there bumper years, and in bad years borrow against the land to survive, simple, good harvest ,good year,bad harvest,bad year,farmers are good at farming,not at trading
Interesting piece on phoshporous http://business.timesonline.co.uk/tol/business/industry_sectors/natural_resources/article4193017.ece