Re: OT: what the heck is going on with bean prices?

Posted by JDseller on October 22, 2011 at 00:39:22 from (208.126.196.144):

In Reply to: OT: what the heck is going on with bean prices? posted by doug in illinois on October 21, 2011 at 21:15:37:

The harvest is about done for soybeans. The acres left are not that big of a percentage. So you are looking at the biggest the supply will get here in the USA. So the market is reflecting that fact. Also the world currency markets are going crazy with the European trouble. So you have a volatile soybean market.

We have had a record high price for the last year. It has effected usage and switched production to soybeans in areas that usually don't raise them. Also the South American producers are expanding all they can to take advantage of this market.

We have had several chances to price fall delivered soybeans above $13. Your local elevator would more than likely do contracts for as little as 250 bushels. It seems like you and your sister have about 600 bushels stored. A better way to put a price floor under them would have been to contract some at different times.

After planting and the beans are up and growing I feel safe selling 25% of my expected yield. Soybeans have only broken $14 dollars twice that I can remember. So when they got into the high $12 I contracted 1000 bushels. (all contracts Nov. Delivery)

Then mid summer after I was able to see how the weed control and rains where going I feel safe with pricing another 25% of my average yield. So I watched and caught another 1000 bushel at $13.25.

Then waited until mid to late August to see how the beans where looking. I then sold another 1000 bushels for in the lower $12 range.

At this point I was done forward selling. I had only 75 acres of soybeans this year. So my average of 58 bushel per acre (Ten year rolling actual production) made my estimated production be around 4200 bushels. I had pre-sold about 75% of that before harvest. I had an average of $12.85 on the three thousand bushels contracted. My actual production is going to be around 4900 bushels. So I will have about 1900-2000 bushels to price or sell later.

So in the future if you think you are going to have about that 600 bushel to sell then try to lock 250 bushel in if the price hits local highs. Then maybe later before harvest you could lock in another 250 if your beans look good. If your local elevator will not do small contracts then asked your tenant if he forward contracts any. If he does asked him if he would do a few extra bushels for you. The elevator can split the checks and payments on one contract. I have two different share crop arrangements that I include my land lords share in my contracts. They just have to understand that when we do it the beans are sold even if the market goes higher.

You need to realistic on those highs too. I know of a local guy that thought that beans where going to go higher when they hit $14.17 local. The highest price I ever have seen here. He still has over three thousand bushels left. He has lost almost $10,000 as of right now. You can't think that sale is going to be like hitting the lotto. Do some here and there to raise your average price. Plus put a floor under your crop.

Replies:

• Re: OT: what the heck is going on with bean prices? flying belgian 19:46:49 10/22/11 (0)

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