Monster Corn Crop

[errolanderson]

USDA 2012-13 corn ending stock
projection is staggering. The U.S. gov't
is forecasting ending stocks a year from
now to balloon to 1.88 billion bu
compared to about 850 million bu this
year. They are pegging corn production
at 14.8 billion bu with a record yield
of 166 bu/acre.

There's a lot of weather that has to
pass under this bridge first to make
these projections accurate, but if USDA
is remotely right, cash corn prices are
headed to $4.50/bu, maybe lower over
time.

This paints a bearish picture for new
crop barley prices, which is great news
for feeders, but tough for growers.

Comments?

[charliep]

Just for discussion, will put my two bits in. Not on the basis you would use Errol but at about 85 over, landed Alberta US corn prices would be $5.35/bu based on $4.50/bu corn futures. That is about $210/tonne track southern Alberta or $220/tonne landed feedlot/feedmill. Manitoba and Saskatchewan will be different with the east side taking the biggest hit on prices. Not sure your number on production for barley but mine might be close to 9 MMT (Canada). I suspect barley will still be tight in the coming year. Wheat will be the wild card with 2010/11 and the current one seeing lots being fed. I suspect there should be opportunities to sell feed barley in the $175 to $210/range over the coming crop year depending on area of the province even is US corn futures crash another 50 cents/bu.

[charliep]

Just curious if what new crop bid prices are for barley (feed and malt). I see October traded 30 contracts yesterday with open interest of 177 contracts. A closing price of $184/tonne (not sure whether traded - no trading range shown).

If a farmer wanted to sell new crop barley today, what price would they be bid?

[URL="https://www.theice.com/marketdata/reports/ReportCenter.shtml?reportId=11&productId=3657&hubI d=4205#report/11"]ICE Canada futures[/URL]

[errolanderson]

Starting to see new crop feedlot delivered
bids for fall discounted about 50 to 80
cents/bu. It's early for new crop data.

Suspect that old crop feed barley bids
have peaked, but it may be June before a
break is seen. Time will tell.

[Happytrails]

Just wondering why the USDA is predicting a record corn yield when the seed is just barely in the ground. Wouldn't basing your forecasts on average yields be more responsible? Looks and smells like a scam.

[errolanderson]

Yes, this could definately be the high
water estimate. USDA may chop these
numbers down in future reports.

It seems like its one thing or another
right now in markets . . . JP Morgan
derivative fiasco will be affecting global
markets tomorrow.

[MarshallDillon]

What's the canola market going to do if Sask. can't seed due to exsess moisture? I hear you guys are one rain away from disaster...

[furrowtickler]

Reality bites more than often. Intentions are just that, intenttions. We all intend to seed 100% but mother nature rules no matter how fancy equip we have. JMO