South Africa Drought

[Klause]

South Africa is into year 2 of an extreme drought.


Again no NA media coverage. This link takes you to Deutsche Welle which is the German equivalent of BBC


[URL="http://m.dw.com/en/south-africa-suffers-worst-drought-in-decades/av-19017766"]http://m.dw.com/en/south-africa-suffers-worst-drought-in-decades/av-19017766[/URL]

[farmaholic]

It might be Western Canada's turn next year for a more widespread severe drought.

We have no reserve moisture left...tapped out.

We managed to pull off a half-assed crop this year, without replenishing some moisture reserves and/or timely rains, next year could look real ugly compared to this year for us.

Good thing time is on our side.....for now.

[SASKFARMER3]

It seems the market doesn't care if Argentina is flooded.
If it froze over and over in Australia.

If canada has way less grain because of Drought.

If USA doesn't have the crop it says it has.

It is just totally bizarre that they only talk is to drive the market down.

[farmaholic]

[agstar77]

Why are you surprised? The open market is never rational. It is all about making money. You have to learn to play the game. There will be a reckoning, we just don't know when.

[bucket]

The longer the market or grain cos can book their space and movement out the longer the prices stay in the shitter. ...

This summer when they couldn't fill trains the price rallied but they are booked with new grain now and the smell of new paint decals is so addictive for some producing videos of their farms the grain has to move.....and really at 50 bpa and 6.50 they are probably making money...

The dunb****led farmer....

[farmaholic]

Does anyone here deliver grain on a basis contract and price the futures later?

Market rallying: doesn't anyone think it makes a difference whose hands the grain is in, Producer or GrainCo?

What about TPAs, GPOs, Market Manager contracts?

How is a GrainCo supposed to source it's grain? Make the sale first and hope to buy the grain with a built in margin later? Buy the grain first and hope to find an end-user that will buy it from them above the cost to the GrainCo.

[bucket]

The grain cos know how much grain is out there now....the yield reports are in....the grades have been discussed....basis contracts are promoted when they want delivery but don't want to bid the market...

Vancouver and the prairies are sitting with 50 percent space .....the boats waiting are way down....the system is in idle.....very few lineups at elevators....farmers had the space for this crop....maybe there is a tug of war starting.....

[crusher]

Get involved with your local Canadian Foodgrains Bank harvest. Every little bit helps. This year we have producers donating small fields where average Joes can buy an acre to donate to the cause.

[burnt]

Basis contracts are the market's best friend for undermining real price discovery for the reason given above - they have control of your grain without having to bid for it.

I turned this feature around one time and asked the local elevator if they would let me lock the Chicago price and leave the basis open. The guy on the other side of the desk darn near knocked the desk over literally trying to jump back from the suggestion - "Oh no", he said, "that would leave me with all the risk!"

So then I told him how that's what a basis contract does to the producer... he got really quiet - the elevator gets their handle and move the product out, the market gets to use the product for free and the producer carries all the risk.

I have yet to hear of anyone who was pleased with the eventual outcome of a basis contract.

It would be of great interest to discuss right here how basis contracts have turned out for those who have used them. Does it average out for winners and losers?

[burnt]

I've used options when I used to grain farm more acres but they were not all that effective either. Maybe I'm just showing myself to be a poor marketer! LOL!

[farmaholic]

.......thank you burnt. And I always think I'm wearing one of the hats in my other post. When I have time I will make a tin-foil crown for myself.

I can't believe some of the marketing programs presented to Producers. And you only ever seem to hear the success stories told by both the Producer and GrainCo.

Keep control!

[MBgrower]

The longer the market or grain cos can book their space and movement out the longer the prices stay in the shitter. ...

This summer when they couldn't fill trains the price rallied but they are booked with new grain now and the smell of new paint decals is so addictive for some producing videos of their farms the grain has to move.....and really at 50 bpa and 6.50 they are probably making money...

The dunb****led farmer....

pretty much sums it all up.

[burnt]

Gonna rain on this parade but this story is from last yea (2016).

South Afirca had a record maize crop this year, as did Zambia, which is just a bit north of S.A.

The Zambian maize crop was so big that they lifted export restrictions, leading to fears that the export price might be too attractive to turn down and lead to local shortages.

Much of the Zambian population lives on what they can grow on their plot of land, eating "nshima", ground maize cooked/boiled/fired in oil..., 3 times a day. So, having a sufficient supply of maize on hand is critical.

Somewhere I have a bunch of pictures of how the small-holders store their year's supply of maize in "cribs" outside their "houses".

It's a different world over there, my daughter has discovered as she works there as a nurse.

Can't upload the pictures for some reason. Maybe it will prevent culture shock this way, lol!

[Hopalong]

Many of us in first world countries forget how lucky we are.
Going back to subsistence type farming is not likely to happen.
People here, including farmers, have never had it so good.