On Friday, September corn futures lost 3 1/2, ending at $3.07 3/4. That is down 8 1/4 from last Friday. December corn lost 3 cents today, ending at $3.20 3/4, off 6 1/4 this week.
November soybeans lost 10 1/2 today to finish the week at $8.67 1/2, and down 25 for the week. January beans were also off 10 1/2 today, ending at $8.74, losing 24 this week.
The big story this week was the drop in corn and soybean prices on Tuesday. We saw corn lose 8 to 9 cents, while soybeans were off 13 to 14 cents. The crop condition scores were part of that, but we also saw one of the first private analysis estimates for the final USDA numbers. Stone X, formerly INTL FC Stone, released their expectations late Monday, and they were bearish for both corn and soybean values. We’ll see more of these private analysts in the coming days ahead of the August 12th WASDE report. Over the next few weeks, there will be various groups crisscrossing the Midwest taking good looks at corn and soybean fields and trying to estimate yields and production numbers.
For more information about factors impacting corn and soybean values, tune into our free weekly podcast, The Bull-Bear Banter, which can be found here: https://landusexperience.podbean.com/
Recently, I re-watched the movie Moneyball with Brad Pitt and Jonah Hill. I’d seen this movie many years ago and remembered it as being a good movie. I’d forgotten just how good the story was. I remembered it mostly as a story about the Oakland A’s baseball team, and how they put together a 20 game win streak.
As I watched it this time around, I couldn’t help but be struck by some of the revolutionary thinking that took place in their organization. They really changed the way that baseball was thought of by those in management. They focused on what was important, as well as what really wasn’t important. I was also able to find an entire article online about how it was really an amazing lesson in organizational change.
There is a scene early on in which Jonah Hill’s character, Peter Brand, explains to Brad Pitt’s character, Billy Beane, that the problem with the way EVERYONE in management was approaching baseball was all wrong. They were all chasing the next superstar player. Peter Brand believed that they shouldn’t be buying players. What they should be trying to do was buy wins, and the best way to do that was to get “hits”. Just get on base. The more people on base, the greater the odds that they will score. The more scores, the more wins.
Later, Pitt’s character, the manager of the team is helping some of the players understand the small differences in what they were now trying to do as opposed to what the players had learned to believe over the course of their lifetime. One of the players said, “but, you’re paying me to steal bases”, to which Billy Beane responds, “No, I’m paying you to GET ON BASE, not get thrown out at 2nd.”
I started to think about all of this in terms of marketing grain. Many of us have learned over our lifetime that if we just sit back and wait, something good might come along and save us and that we’ll be able to hit a home run if we’re just patient enough.
It occurs to me, that like Major League Baseball, we should really consider changing the way we strategically think about marketing grain. Look for a base hit. Just get on base. I’ve told some people that there is a reason they aren’t good at marketing grain. I also tell them that there is a reason why they ARE good at growing crops. They LIKE to grow crops, and they HATE marketing grain. So, every chance that they get to learn something new, they gravitate toward learning how to grow crops better. And they AVOID the one thing they hate, marketing grain. It’s easy to see and point out, but it is tough to change. I’ve actually told a couple of people that they should just quit trying to get better at marketing grain. Just STOP.
And then, give that responsibility to someone else in the organization. Let your son, your wife, your daughter, or daughter in law have that responsibility. AND THEN GET OUT OF THEIR WAY. And also realize, they are going to make mistakes. You already know that you have. Let them, because that is when they are going to learn. You keep learning about fertility, hybrids, machinery, new farming techniques and let them spend their time learning about marketing grain. I’ve often thought about farming like running a manufacturing business. Think of yourself as the CEO. Do you think the CEO of a manufacturing business would even try to do EVERYTHING? Maybe at the beginning, when they are working out of their garage. But as the business grows, they simply can’t do EVERYTHING. In order to be successful, they’d have to hire a good accountant, a good mechanic, a person to sell the product, etc.. it’s called “Division of Labor” – find the specialists you need (or grow them) and hold them accountable for their part of the business. The CEO still has to oversee it all and get regular updates, maybe challenge someone’s thinking from time to time. But, they sure wouldn’t do it all as the business got bigger.
That’s enough for now. If you get a chance, watch that movie again sometime. Try to absorb some of the lessons from the story. I think we’re going to need a lot of base hits the next year or two. Quit trying to hit the home run. Just get on base. Maybe learn one new marketing alternative this year, OR find someone to do the thing you hate to do.
Agree? Disagree? Let me know: Tom.Guinan@LandusCooperative.com