US corn cro

[malleefarmer]

A leading AG bank here today suggested a corn
yield f anything less than 145 bushels and more
abandoned acres the USA could virtually run out
of corn.
Huge price induced demand destruction would be
needed to avoid this situation was the quote.

Chinese proverb the ox maybe slow but the earth
is patient so seems sit and wait seems slack
attitude for risk management but may b prudent
for few weeks

[charliep]

That would represent 20 bu/acre less than the June
forecast or 1.8 billion bu in total. The June carryover
forecast was about 1.8 billion bu. The US wouldn't
run out of corn so consumption/disappearance would
have to get rationed to the tune of 1 billion bu.

Will note the rise of wheat feeding around the world -
will continue. Likely a continuation of the reduction in
the North American cow herd. Ethanol? China has
been on the verges of being a major corn buyer -
likely will go back to domestic supplies only - will
adjust livestock numbers to the realities of their
available feed supplies/economic situation. Buyers
do adapt to new realities.

Not in anyway pretending I know what will happen. It
is a very interesting world and something that makes
every morning exciting. Pretty big negative futures
prices last night. A normal re-tracement/backing off
and not all bad but a reminder what goes up can
come down.

[wd9]

Really Charlie, either it will go up or
down? :-)

[charliep]

The only thing I can guarantee you is prices will not stay the same with 20 plus cent price moves a daily event. Both of us have seen enough weather markets over time. Trend in the charts is still up but but there are a lot of gaps in the charts to be filled. Strategy and discipline are the most important things to me. Pick your poison in how you want to price in this market.

[charliep]

Just for a chuckle. If I was all that smart on market direction, you likely won't see me posting here. I would be trading futures and on a beach someplace enjoying the millions I would be making. The comments on general economic conditions cause as much angst for me as anyone - that is where my risk exposure is.

[hobbyfrmr]

I carry the same angst as Charlie. I know that
these are new and exciting times. These higher
prices are necessary to cover cost of production
and if the world wants farmers to grow food for
them they will have to pay that farmer a
respectable price.
I have been farming 20 years and much of it was
for break even prices. Anytime I started to finally
gain a bullish attitude the industry would find a
way to punch me in the face and both kidneys!
It doesn't look like it will happen, more than ever it should not happen, but ....standby for a downward
correction.

[charliep]

Informa Economics had article today that highlighted Ukraine is borrowing money from China to invest in agriculture with debt repayment in the form of corn. A lot of corn customers are diversifying where they are sourcing feed away from the US.

[cottonpicken]

They are diversifying away from the us dollar.

[wd9]

Bang on Cotton!

[bucket]

charliep you said

Just for a chuckle. If I was all that smart on market direction, you likely won't see me posting here. I would be trading futures and on a beach someplace enjoying the millions I would be making. The comments on general economic conditions cause as much angst for me as anyone - that is where my risk exposure is.



Just out of curiousity - is that a jab at errol. He is still posting right?

[charliep]

Not at all. Just a chuckle at my humaness. Errol and I
worked together 20 plus years ago and have been
friends ever since. I have also respected his opinion
and listen to his call of the land segment every Friday.

I wish I had this market figured out as well as you
guys think you do. But I am a simple student of the
market.

[cottonpicken]

Man there is some freaky talk about the corn
crop.Complete devastation?

Any possible scenario ideas?

Ethanol plants close?
Culling of cattle herd?
Massive machinery depreciation?

[ianben]

With the price of crude oil below $100 surly the
ethanol plants must be planning some sort of slow
down /closure.
I have been trying to get an idea on max value they
can pay for corn at given crude price .

Any ideas on what this is?

[greybeard]

Ethanol is still mandated at 10%. It never had to be price competitive.

[ianben]

US elections Nov.
HIgh food prices or less green fuel ?

Quite word with oil producers to reduce % and most
voters would never know.

How do they check the inclusion rate anyway?

If it is like here oil companies just pay extra tax for
below 5% inclusion.

Oil companies make max profit.
Government collects more tax.
Voters think fuel is green, no way they can tell what is
going in the tank.

Good way of being re elected and keeping
shareholders happy.

No ethanol produced in UK for over a year, one plant
mothballed, one plant completed but never opened
and one plant with permission but no funding