USDA Predictions

[silverback]

Is going to live up to the hype??

The feelings going into this report are similar to last year. And we we all know what happened last year!! It scares me when no matter where you talk everyone is bullish.

[SASKFARMER3]

Any time a Gov Agency is giving us a Report it scares me. The USDA is famous for this. How may times has stats Canada helped us as farmers. I can count on one hand. But that being said it will be interesting for how much winter wheat was seeded and what world crops look like. Argentina Brazil India and Pakistan.

[charliep]

The numbers:

http://www.nass.usda.gov/Publications/index.asp

[charliep]

Markets up hard on positive numbers in today's USDA report. Less winter wheat the main positive factor although surprises on the stocks report also caught everyones attention.

[boarderbloke]

I never ever thought i'd be kicking myself for selling canola at $12.08. are we truly in a new era of higher prices, are prices finally moving up from where they've been stalled from the last decade, or will they drop back down once these five or six cargoes are full?

[melvill]

Slightly off topic but, in my opinion, the real question regarding crop prices and margins, if prices stay at or near these levels is: how long before these decent margins are eroded or gone by dramatic increases in farm land and machinery prices? Farmers have a habit of bidding away decent margins through increased farmland and machinery prices. We've seen it before.

Comments?

[boarderbloke]

melvill, I agree with your concerns. I don't think that will happen until it's clear that we've truly moved into a new era like the 20yr ag Bull market that some have theorized (i suppose you can always find a report or think tank, that will say whatever you want to believe in!) I think for a while though(maybe 2 or 3yrs) there will be so much land and equipment for sale from all those elderly farmers who's children have long left, and have been holding on for one last ag Bull market to sell out. One of the biggest dampers to expansion will be labour. How soon will it be till we have widespread Mexican labour here? a serious question??

[cottonpicken]

I've got neighbours who are bringing in foriegn labour.

These prices are here to stay and all the problems that come along with higher prices will be much easier to deal with than or former low price and problems.

If the price of wheat was 4 dollars in 74,then adjusting for inflation you can come up with 40 dollar wheat.

My question to everyone his how do explain 5 dollar corn and record production?

There is more factors than supply and demand at work.

[cottonpicken]

Lee,i'm dieing to know the name of that consulting company that was telling people to sell 25% of 08 production a few months back.

[LWeber]

The BOC inflation calaculator

http://www.bankofcanada.ca/en/rates/inflation_calc.html

$4 wheat in 1974 is $16.40 in 2007

What calulator are you using?

[melvill]

Well, CP, it's pretty easy to make fun of a market advisory recommending selling 25% of new-crop canola production back in Nov, now that we have the luxury of hind-site 'cause only hind-sight is 20:20. I have yet to see anyone who has even 15:20 foresight. Some people think they have that kind of foresight but . . . . .

[charliep]

Your answer to record corn crop and $5/bu corn is called US biofuel policy. If you reduced US corn usage side in ethanol, you would have $2/bu corn today - not $5. Ethanol 2005/06 - 1.6 bln bu. 2006/07 - 2.1 bln bu. 2007/08 - 3.2 bln bu.

In the middle of a presidential election campaign, don't think anyone will talk about changing direction on bio fuels policy (too much mother hood and apple pie). Slow in the US economy and impact on consumers will be interesting however in the future. Things have been okay (not great) for the US livestock producer but that is about to change is corn prices stay on their current course.

[charliep]

USDA actual numbers for those who are interested.

http://usda.mannlib.cornell.edu/usda/current/wasde/wasde-01-11-2008.pdf

[charliep]

Apologize for providing useless information but total western Canadian crop production (wheat, feed grains, oilseeds, pulses, etc) was 45.4 MMT (statscan). US will use 80 MMT of corn for ethanol in 2007/08. The increase from 2.1 MMT to 3.2 MMT (28 MMT) represents an increase in consumption equal to about 60 % of the total western Canadian crop.

[charliep]

Sleeping. Last sentence should be.

The increase from 2.1 bln bu to 3.2 bln bu (28 MMT) US corn used for ethanol represents an increase in consumption equal to about 60 % of the total western Canadian crop.