Letters to the Editor

Letters may be emailed to edit@dtn.com or mailed to Greg Horstmeier, 9110 West Dodge Road, Omaha, NE 68114.

Posted 10/23/15

Letter to Darin Newsom, in response to his Oct. 23 Newsom on the Market column, "The Premature Burial"

Darin,

Everyone is screaming at USDA about how bean predictions are bad for the last 20 years. Isn't it as simple as you predict China demand and you win? We haven't been correct because USDA hasn't predicted China demand right. The price discovery for beans is simply set by China imports. 76MMT is one price; 82MMT a much different one.

Ed Prosser

VP and GM AG Trading

The Gavilon Group, LLC

Darin responded:

Ed,

First, thank you for your email. I appreciate you taking the time to write.

Second, I agree with you. USDA has no idea what the supply and demand situation is in China, which is the very problem itself. Rather than guessing, more often than not to the high side, why not end the charade and just stop doing supply and demand projections altogether?

The system, particularly in soybeans, has failed U.S. agriculture and only serves to generate trade on report days now. I’ve always believed that the market itself, through basis (domestic and global, most notably South American) and futures spreads, can act as a more reliable indicator of real global supply and demand.

DTN Senior Analyst Darin Newsom

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Posted 10/08/15

Editors,

Sequestration is a wonderful thing. Makes for a nice safety "anchor." As if the price of cash grain isn't bad enough being in the toilet, it is getting to the point of just haul in the grain and dump it. Because that gold is worthless.

As for the safety net [anchor]: The paper used in its writing was worth more than the farm bill itself. When [they] wrote the farm bill, grain wasn't supposed to be this cheap. Well it is and now we see how much the guys on the hill really want ag to crash.

They are going to take 6% or 7% right off the top of your ARC check. That should help keep most of us in the red column. Well it looks like the losses will be huge and no check from Uncle Sam.

Some of you may be able to claw back some tax money for a change. Then to add insult to injury, the government held back the check for the last year of the old farm bill. There will be many of us getting two checks this year -- also shorted 6% to 7%.

Reminds me of my days working in construction. Job would start winding down and everyone would start looking for the two checks and a road map to the next job. Well in ag, if you do get the two checks and a road map you are off the farm, out of the house you live in. Then you either move to town or go to work for the neighbor who is still hanging in there. He should be standing not hanging.

Here is something to think about and I have noticed. Back when corn was at $8.00 a bushel we didn't have too many hungry people. Now that corn is $3.00 and something a bushel and heading for $2.00 a bushel, have you noticed how many hungry people there are and the food banks cannot keep up? I was told once that poor people cannot help even poorer people. Why? They have no spare change to give. And that goes with the farms of today. But with farms tightening up and they are not buying anything other than what is needed, that in turn shorts the suppliers and other vendors and they cut back also. That is how you get more hungry people using the old barnyard look over the fence.

So guys, I hope that all of you can plant hedge row to hedge row next year.

Crawford McFetridge

Finger Lakes area, New York

(CZ)

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