Bullish thoughts video for USDA report tomorrow

[errolanderson]

mcfarms . . . not here to p . . you
off.

economics of U.S. corn at these price
levels do not work . . . no if, buts or
maybe's

yes, ethanol mandate may be questioned
(a wildcard).

us soybean crop rating next week likely
steady to up.

spec buying may have blown its wad . . .
a reversal could be ugly when the funds
decide to bolt (possibly within a few
days).

[countryguy]

How convenient made up demand figures can be when attempting to distort markets.

[charliep]

I would more worried about the cattle side. Cow
numbers driven down by pasture/forage costs and a
lot of pain in the feeding side. It will take a long time
for these numbers to re-build - simple biology. I
would also highlight these numbers will drive
production decisions around the world starting with
South America. Will Mother nature cooperate? Good
question.

I would also watch the discussion around food
inflation and how governments respond. This will be
in conjunction with the activities that Europe and the
US in amongst others are trying to keep their
economies afloat.

There will be a time to sell. Markets always over re-
act. I would be carefull with my comments similar to
Marie Antoinette (Let Them Eat Cake). You know
what happened to her.

[charliep]

countryguy - you do realize we can't have negative
carryovers. The process now is to recognize there is
not enough corn/soybeans to meet the needs of all
traditional customers and to determine who steps
away from the market. The reason we have $8/bu
corn and $17/bu soybeans. USDA is simply a point in
time estimate of how this may happen. History will
determine reality.

[LWeber]

The projected wheat range for the 2012/13 season average farm price is raised substantially to $7.60 to $9.00 per bushel, compared with $6.20 to $7.40 per bushel last month

The 2012/13 season-average farm price for corn is projected at a record $7.50 to $8.90 per bushel, up sharply from the $5.40 to $6.40 per bushel projected in July.

The U.S. season-average soybean price is projected at $15.00 to $17.00 per bushel, up $2.00 on both ends. Soybean meal prices are projected at $460 to $490 per short ton compared with $365 to $395 last month. Soybean oil prices are projected at 53 to 57 cents per pound, up 0.5 cents on both ends

US Corn S/u ratio is 5.8%

US Beans s/u ratio is 4.2%

US Wheat s/u ratio is 28%

Investors who had fled agricultural commodity funds for more than a year rushed back in droves last month as the worst U.S. drought in more than half a century caused prices to surge, data from fund tracker Lipper showed on Friday. Exchange-traded funds and other security products that track agriculture-focused futures or indexes re-corded an inflow of <b>just below $110 million in July, the highest since March 2011,<b> according to the data.

[burnt]

It seems that when we producers think that there is no limit to how high prices can go, that is usually when things turn around.

I think there could still be some upside, but I did not want to go into this report without having some new-crop pricing in place. So yesterday I sold 1/3 of our "projected" corn yield and almost 1/2 of our soys. $7.57 and $15.51 (plus premiums) respectively.

If that is the low of our marketing for the 2012 crop, I will be as happy as a pig in poop.

[cottonpicken]

Beans are going to the moon.

[dmlfarmer]

But its (Cargill) CEO appeared on television last week to voice support for easing the U.S. government's mandate to produce rising amounts of ethanol, saying the huge diversion of corn to making the fuel was causing corn prices to soar and squeezing livestock farmers -- including Cargill, a big beef producer.

(full story: http://www.albertafarmexpress.ca/news/cargill-posts-worst-quarter-since-1991/1001611019/6u8y64sWrl10wMw4q/?link_source=aypr_ABEX&AF=&utm_source=ABEX&utm_med ium=email&utm_campaign=ABEX-EN08102012&link_targ=DailyNews )

There are more non farmers who are voters than farmers in the US so I question why a government would wait until after the election to curb food inflation due to high commodity prices!

[cottonpicken]

**** i should just keep my mouth shut.

Does anybody even follow the price of ethanol and
the break even price conversion for corn?

Does anybody even realize the mandate doesn't mean
anything now?

Does anybody realize 110 million of inflows is non
sense number when compared to total contract
holdings of funds?

Does anybody realize that any analyst screaming sell
in the face of overwhelming rising open interest
maybe doesn't see the trees because of the forest.

Does anybody compare price on an inflation adjusted
basis and say something like"holy **** are beans
cheap"?

[charliep]

The sources I follow suggest no changes to US ethanol policy until after the election and then after a consultation period. Nothing will happen fast. The risk is changes will happen after US farmers plant a 100 million acre 2013 corn crop.

I find watching the market on a day like today somewhat amazing. Corn popped through resistance but hasn't managed to stay above (mid day). Soybeans are higher but still in the trading range.

[LWeber]

Does anybody realize 110 million of inflows is non
sense number when compared to total contract
holdings of funds?

Funds hold 29.12 MMT of bean contracts or close to 17 billion dollars at $16.50/bu

Yes ... but they sure as fk arent going to dump <b> NOW <b> ....I only added it because someone suggested they could dump "in a few days".

The most bullish fn report for beans I have ever seen and it is 7 months before South American harvest. Now add the U.S. crop is probably overstated by 2-3 bushels per acre.

[SADIE]

In our area south of Saskatoon in the Lake Diefenbaker area the same thing.

Seeing a cow-herd is fewer and farther between.

As predicted.

[charliep]

The margin chart cottonpicken mentioned. You may be referring to another source.

[URL="http://www.card.iastate.edu/research/bio/tools/proj_eth_gm.aspx"]August 2[/URL]

Will note they refer to operating. Not sure whether fixed costs are included.

[jamesb]

In regards to the ethanol thing, a smart guy that I know was talking about more oil prices. If oil holds higher then the ethanol plants can stay in the black but if oil should drop much then the plants will be mothballed because they can't make money where corn is at if oil takes much of a drop. As farmers we want grain prices as high as we can get but it will be interesting in regards to demand destruction for the livestock industry need for feed grains. Bottom line for me is that last winter almost all market gurus were using what information was infront of them and suggesting over supply for the market. The thing now is it looks to me that we now are going to have a couple of good price years to rebuild stocks because the US crop is so very short.

[charliep]

Just curious on all market bulls comments on soybean oil. Has been the laggard to date although some life this morning (one day does not a market make). Do you see the oil side participating in a major way in the soybean rally or 100 % meal driven?