What is the simplest way to add a third function on a JD1050?
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I don't know what those caps are you have circled. All those loader control valves look similar, but differ internally. I'm not even going to guess. We can figure it out if you want to do some searching for a flow diagram or at least get us a make and model from your original control valve set. That info is usually right there on the control valve.
The other part of your question is easy. There are even choices and several almost equally easy ways to add a third function. In my opinion, for the non-hydaulic guy, the easiest of all is to go to one of the after market surplus hydraulic sellers online and replace your 2 lever control valve with a near identical unit having 3 levers. There is one lever for each independently controlled hydraulic circuit. This is also the most efficient way to preserve flow rate and pressure on older open center hydraulic tractors like yours.
A lot of us do-it-yourselfers here use
SurplusCenter.com for control alves.
Hydraulics | www.surpluscenter.com
They buy & sell new overstock and compete with the half a dozen other outfits doing the same thing online. All of them have good people to help with questions.
There you will find as many types of valves as you like. You can order a get a nice new USA-made control valve set with three handles for the three circuits instead of just the two you have. That's easiest and probably best way to go. Get a couple of hoses for the grapple. Most of this hydraullic control valve and parts will bolts right up. There are a few specs to be aware of - so If you decide to do it this simple way, then give the seller the info from your existing valve body - make and model number of your control valve - and they can match it. Or we can guide you from here.
Mounting is simple. You can often use the same bolts, same mounting, and swap over your existing hoses. Then add the extra hoses for a grapple, and you are in business. Until you actually get a grapple, remember to use one of the new grapple hoses you ordered to make a fluid loop to protect the valve until ready to plumb in the grapple. I just looked online, here is a 3-spool control that is top of the line, $350. and would work for you.
3 Spool 8 GPM Prince MB31BBB5C1 DA Valve | Wolverine by Prince Mfg | Brands | www.surpluscenter.com
If you want to use your existing two spool loader control valve, things get a little more complicated but not much. But unless you have a well-stocked hydraulic junkbox, you won't save enough money to matter.
BTW. tractors don't come much better or simpler than your old Yanmar...er, John Deere 1050. It is the perfect machine to start with, and good enough to keep a lifetime.
Luck,
rScotty