I always enjoy Michael Cordonnier's reports of crop production in South America. He does as good a job as anyone telling us in America what is going on in South America. We all know that infrastructure is lacking in South America but that is slowly changing.
This year they planted later than normal so their crop is coming to market slower, too. That has helped us keep US exports up to some extent. Today is a good example as soybeans closed to a price high enough that it has farmers making moves on new and old soybeans.
|CGB-Cincinnati - Beans|
|Delivery Pd||Option||Futures||Basis||Cash Price|
|LH FEB 2015||SH5||$10.16||$0.30||$10.46|
One thing that caught my eye in these reports is that the US can ship beans from New Orleans for $30 per ton but South American farmers can spend $70 a metric tonne just GETTING their beans to their port. That reaffirmed what I have been thinking.
Still, too many beans are too many beans and the world has a big crop this year. That makes for lower prices and how many US farmers can grow soybeans for $9.91 this year and stay in business?
Those kinds of calculations takes some of the fun out of farming but it is a business. If you enjoy your job they say you never have to work a day in your life. I have met a lot of farmers who are not enjoying their job as much as they did two years ago.