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Its the time of year I start to empty my grain bins.  The farm is situated in a flood plain and if the winter results in an ice jam at the mouth of the Thames river, several feet of water could easily lay over the land if any of the dikes let go.  This hasn't happened since 1976, but he who is not prepared will eventually suffer.  So generally I plan to get the bins empty or within a truck load of empty so it won't take too long to save the grain.  With the winter being mild, there is no ice on the Thames to speak of, so i am in no rush.  As a result, only one load has been sold and hauled out.  To my luck, i sold just before the USDA report, and got a good price so now i hoping it will go back up.  But some days it does and doesn't at the same time.

I know that sounds confusing, but the Chicago board of trade, CBOT, price isn't all its cracked up to be.  As a seller, i must add the basis, or local variance to get the cash price.  And this basis is very often a negative number.  It amazes me how different the price of grain can be.  This week the price of corn in Louisiana was +0.76 over CBOT and in Chatham-Kent it was -0.45, thats $1.21 per bushel different.  I am sure corn was moving south this week.  Having to move the grain to Louisiana to get the extra cash would cost me almost as much, so it doesn't make sense to hire a truck, however, the big grain elevators can ship by rail and make some money by moving grain.  

So yesterday the price of soybeans on CBOT was up almost a quarter at one point, but the cash price went down as the basis went even more negative.  Its not easy to tell if its time to sell or not, good news on one market doesn't mean cash in the farmers hands.  And although i can watch the market in Chicago, its much harder to watch the local cash price.

Trying to link prices to global weather reports and trade numbers sounds like a good scientific approach.  But the results are never the same.  I get the impression the price on CBOT changes, an excuse is given, and the cash price does whatever it wants.  There is more chance of guessing where the ball will fall in roulette.  

Then theres the Canadian dollar, if it goes up the cash price....goes down, usually, sometimes up....oh I give up, no one thing sets the market and whoever figures this out will be soon learn the rules change.

Now I have invested in the markets before and don't get to stressed over moves up or down, but in this case I need to sell eventually and in the short term to fund this years operation.  The desire to hit the high price is great, and a small price swing makes a big change to the bottom line, but i have to tell myself these are all good prices, it was only a few years ago $9 beans and $3 corn was the best you would get, of course input costs were much lower then too.   Well I will continue to rattle my brain about this and see what the rain in Brazil did to me tomorrow.

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