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How high can corn go?


Steve C.
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I'm not in the business anymore, but between bad spring weather, fertilizer prices and availability, fuel prices, parts availability, and more bad weather I'm wondering just how bad the situation can get.  It's around $8 now, isn't it?

Looks to me like even if the weather straightens out the crop's gotta be pretty short this year.  In an average year around here, most of the corn's in the ground by now and on some of the faster drying ground a lot of it would be several inches high.

And now there's talk of raising the ethanol content in gas to ease fuel costs.  Seems like it's gonna be tough all the way around - raising it, feeding it, or burning it.

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I wish I knew, the thing is everything like fertilizer and chemicals goes up too. I have some old crop corn priced at $7.29 for April and May delivery, which was a darn good price. Now cash corn at the elevator is $7.89. I wouldn't want to be buying corn to feed hogs right now. 

Pretty dry here too. The guaranteed price for corn on RA crop insurance is $5.90 and soybeans is $14.33 with fall price to be determined. I'm at the 80%  level. 

I don't know why they are talking about making 15% ethanol available in Iowa year around, it has been here for a few years now. We have 10, 15 30 and 85% ethanol levels available. If I had a vehicle that could use 85 I'd use it. 

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10 minutes ago, Steve C. said:

I'm not in the business anymore, but between bad spring weather, fertilizer prices and availability, fuel prices, parts availability, and more bad weather I'm wondering just how bad the situation can get.  It's around $8 now, isn't it?

Looks to me like even if the weather straightens out the crop's gotta be pretty short this year.  In an average year around here, most of the corn's in the ground by now and on some of the faster drying ground a lot of it would be several inches high.

And now there's talk of raising the ethanol content in gas to ease fuel costs.  Seems like it's gonna be tough all the way around - raising it, feeding it, or burning it.

7.15 fall contract here currently. 

Can't get it to warm up or stop raining or snowing to dry the fields out. Just finally got our manure spread that we've been trying to spread for a month. Same with fertilizer and we still have a little bit of that left to spread. Need to plow down the manure and subsoil some spots that are packed. Haven't even attempted that yet. Have hay to plant on some reclaimed gravel pit too.

Last year at this time we were done plowing, planted 4 acres of hay and had 120 acres of beans in. Dont even have all our seed yet. 

And top it off. Its snowing today. 

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Just now, jass1660 said:

The E15 is a ploy by Biden. Won’t lower gas prices as there are only 2300 stations in the United States capable of sell the E15 blend. 

Somehow this seems similar to bleeding the strategic oil reserve to lower gas prices.  Maybe more like a feel-good measure?

But I digress.  Feeling for you guys who can't get in the field..

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It’s been proven planting soybeans earlier yields better than corn. Most fellows have gone to planting soys first then start on corn in May when ground is warm and plants will take off quicker. 

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7 minutes ago, jass1660 said:

It’s been proven planting soybeans earlier yields better than corn. Most fellows have gone to planting soys first then start on corn in May when ground is warm and plants will take off quicker. 

Interesting.  I hadn't heard that.

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10 minutes ago, jass1660 said:

It’s been proven planting soybeans earlier yields better than corn. Most fellows have gone to planting soys first then start on corn in May when ground is warm and plants will take off quicker. 

There are some soybeans planted here already. Soil temp here is 40 degrees. I know of some oats planted 4 weeks ago that aren't up yet. 

 

19 minutes ago, jass1660 said:

The E15 is a ploy by Biden. Won’t lower gas prices as there are only 2300 stations in the United States capable of sell the E15 blend. 

Sure is. About as effective as a band aid on a heart attack. 

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Cash corn is over $8.00 here. Even with high input prices it still pencils out on paper, the problem for us is that we can only borrow so much. Our operating line has a limit and once we hit it we aren’t buying any more nitrogen rather we figure it will make money or not. We have beans in the ground here, no corn. The oats I drilled several weeks ago look pretty good. It’s 29 F here right now. The corn crop in my area is not in jeopardy of any losses yet. 

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Just the weather alone tells me that corn & other crops are going to have a difficult season. Usually, someone in the neighborhood has at least ripped up by now.

Forgot to add....

Up until about a decade ago, the family used to hold a plant sale every Spring. Mid April was the time we would be feverishly digging up plants to pot. The only thing that is up right now are a handful of crocus & one iris on the south side of the house. Been like that for the last 6 years. Last year we had a snow shower on May 3rd!!

Winter says hold muh beer!!!

Mike

IMG_20220418_091624[1].jpg

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Nitrogen is $1 a unit here and that still pencils out on wheat on an average crop.  I’ve had one neighbor forward contract enough wheat to pay the fert bill to guard against price collapse.  

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32 minutes ago, m.c.farmerboy said:

I hope you guys get all you can get and then some because when it crashes it's going to hit HARD

That’s what people said 10 years ago.  This year was the 3rd time in almost 20 years I sold wheat for $9 or more and the the second time I’ve sold durum for $14 or more.  One year I sold wheat some for $20.  Prices did collapse but the inputs did too.  Only thing that didn’t was machinery.  

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We have alot going on.

War in Ukraine, drought in South America and other parts of the world, China stockpiling grain out of fear, politics, high energy prices. Not to mention speculators in the market.

However these high prices are undermining demand.

If the war in Ukraine ended in time for Ukraine to get planted the markets would drop significantly. Unfortunately the war will probably go on for some time and many more people will be killed.

Thx-Ace 

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Here's an update on Ukraines agricultural situation, use Google to translate.

https://agronews.ua/news/ozvucheno-prognoz-vrozhayu-zernovyh-ta-olijnyh-v-ukrayini/

They expect 5 million acres will not be planted and or harvested. They are having serious logistics issues trying to export grain by rail since their black sea ports are out of action. Their grain exports will be around half of normal.  Millions of farm animals are dead for various reasons due to the war. 

Mariupol is a major port for exporting grain. The pics I've seen show terrible devastation. I expect much of the grain the stored is damaged. It will be some time before it will be useful again. 

Odessa is not seriously damaged yet but they are unable to ship from the port due to the war.

Thx-Ace 

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4 hours ago, Dirt_Floor_Poor said:

Cash corn is over $8.00 here. Even with high input prices it still pencils out on paper, the problem for us is that we can only borrow so much. Our operating line has a limit and once we hit it we aren’t buying any more nitrogen rather we figure it will make money or not. We have beans in the ground here, no corn. The oats I drilled several weeks ago look pretty good. It’s 29 F here right now. The corn crop in my area is not in jeopardy of any losses yet. 

I understand what you are saying and how easy it would be to completely advance your operating line.  However I think any good banker could work to get approval to increase your line.  It would be silly to deny a customer the money to purchase N, that bank would be cutting their own throat.  Inputs are very high but as you said corn still pencils out to be very profitable.  My concern is when the commodity markets correct, everything else won't correct as quickly.  Where people get into trouble is turning into big spenders thinking this will last forever.  It's ok to pay a few taxes, don't need to buy all new machinery trying to avoid them and then be tied down with payments for many years.

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9 minutes ago, Rawleigh99 said:

A lot more beans going in here than usual.

Not started on this side of the Blue Ridge Mtn's yet, currently 2" of snow and more falling🥺

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  In the long run the consumer can not afford the run up in the commodity market.  It will have to come down to spur a wider volume of sales.  Worse because there is inflation in most other sectors of the economy and now interest rates are supposed to increase.  It would mean a more stable society long term.  Live high on the hog but expect chaos shortly down the path.  I don't want to know what it is like to have open season on me like I was a six point buck.  I am already expecting the trespassing deer hunters to be more nasty by fall.  When I called the elevator 10 days back they were  not buying any beans or corn.  

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4 hours ago, FarmerFixEmUp said:

I wish I knew, the thing is everything like fertilizer and chemicals goes up too. I have some old crop corn priced at $7.29 for April and May delivery, which was a darn good price. Now cash corn at the elevator is $7.89. I wouldn't want to be buying corn to feed hogs right now. 

Pretty dry here too. The guaranteed price for corn on RA crop insurance is $5.90 and soybeans is $14.33 with fall price to be determined. I'm at the 80%  level. 

I don't know why they are talking about making 15% ethanol available in Iowa year around, it has been here for a few years now. We have 10, 15 30 and 85% ethanol levels available. If I had a vehicle that could use 85 I'd use it. 

Filled up the Suburban this morning, had a choice of E10, or Enothing(pure gasoline), grabbed the pure gasoline nozzle and filled it up. With the increase in mpg, pure gasoline is either break even or slight savings.

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3 hours ago, Big Bud guy said:

Nitrogen is $1 a unit here and that still pencils out on wheat on an average crop.  I’ve had one neighbor forward contract enough wheat to pay the fert bill to guard against price collapse.  

  As long as the elevator makes good on contracted prices which historically around here has been a big problem.  Big price swings means some elevator is teetering on the edge of bankruptcy.  Yeah, they are bonded but I have heard of plenty of situations where the farmer winds up with 40-50 percent of his contracted price.  That is if the elevator does not dock the daylights out of commodities to save its own tail.  

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32 minutes ago, 766 Man said:

  As long as the elevator makes good on contracted prices which historically around here has been a big problem. 

Thats not the problem here.  In fact just the opposite.  Farmers have been known to not deliver their contract.  Hauling wheat last month, I had the local elevator manager tell me he had several famers short him on contracts because of the drought.  He let him off but told them don't do it again.  That same elevator about 20 years ago kicked a local Hutterite colony out for not delivering their full contract.  That was 3 managers ago and they still can't/don't sell wheat there.  Our two main buyers are CHS which is a Fortune 500 company/cooperative and Columbia Grain Inc. https://www.columbiagrain.com  Neither is a fly by the night operation like some of the pulse crop buyers around here.  

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1 hour ago, Lars (midessa) said:

Filled up the Suburban this morning, had a choice of E10, or Enothing(pure gasoline), grabbed the pure gasoline nozzle and filled it up. With the increase in mpg, pure gasoline is either break even or slight savings.

E10 is 20 to 30cents a gallon less than regular unleaded. E85 is 70 cents or more lower priced. 

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2 hours ago, IH Forever said:

I understand what you are saying and how easy it would be to completely advance your operating line.  However I think any good banker could work to get approval to increase your line.  It would be silly to deny a customer the money to purchase N, that bank would be cutting their own throat.  Inputs are very high but as you said corn still pencils out to be very profitable.  My concern is when the commodity markets correct, everything else won't correct as quickly.  Where people get into trouble is turning into big spenders thinking this will last forever.  It's ok to pay a few taxes, don't need to buy all new machinery trying to avoid them and then be tied down with payments for many years.

Our banker is of the opinion that soybeans are almost as good of a deal as corn and that if you need much more money, then you should just be planting beans. If beans were cheap, they might have a different view. There are lots of guys around me that are limited to what the bank will loan them. 

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