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07-31-2012 03:18 PM
I'll let you all chew into these -- I'm just the messenger, remember! But, just saw a couple of headlines on the newswire here a couple minutes ago showing that though they expect ethanol margins to improve in the next few months, officials with ADM "expect consolidation" and "would consider acquisitions." Under the circumstances with the RFS possibly on its way to the chopping block, what do you think?
On the topic, here are a few numbers to chew on: Where corn prices could wind up based on a few yield estimates (that many I'm sure will argue are still pretty high) and whether or not the ethanol mandate remains in place.
07-31-2012 03:33 PM
He started with a faulty/failed premise and built his house of cards on it from there.
The major flaw to start with was "TREND LINE YIELDS" . Impossible to get anywhere near trend line with record or near record plantings because to get there many marginal traditionally low productive acres had to be used. Trend line hasn't ever been hit with record plantings. Also trend line yields have a built in flaw as no new wonderful silver magic yield inhancing thing has happened like in the "70's to late '90's time frame. The steady climb of yields is not there.
Now throw in a major world wide drought that is going to start it's third year, and well Few large carry outs left in any of the grains. Uncharted waters here guys and gals.
JMHO and worth just what you paid for it.
07-31-2012 03:43 PM
Hey, Hobby. So, you think that just the notion of "trend yields" actually being trend is false, or just the fact that he based his yield projections on a percentage of previous trend yields?
07-31-2012 03:52 PM - edited 07-31-2012 04:20 PM
He based his figures on a false made up # and then got faulty #'s from there on out.
"Garbage in..Garbage out" Pretty typical of many Experts with little or no real world experiences.
Ok just was being interrupted before. Yes I disagree with "trend line" yields. The only way to get them is to only plant the best acres and not the marginal acres like came in this year.
The line that made the "trend" had quite a few low plantings in them and the only time we hit trend line was on the low planting years when basicly only the best most productive acres were planted.
If we had had one of those low planted acre years this year his numbers may have worked close enough. Also this drought is bigger than '88 or '77. He needs to take only the largest planted years and do a trend line from those and see if there is a difference.
07-31-2012 07:16 PM
Just statistically Hobby, you are the one with bizarrely false assumptions.
Trend is trend becasue it is calculated. To start anywhere else will lead to much disappointment. The varities are better. The farmers are better. Everyone's fertility is better. The timing is better. The whole blooming system is better. For some of us, the dirt is getting better. Your whole premise is simply disproved by all of history. Sorry.
Just to his numbers though, without a 3" rain across the whole soybean belt in the next 14 days (none forecast I know) the bean yield might be tough to get above 30 not 40. Put 30 in your bean numbers. Those will be the good ole days. :-)
Just to appease you guys focused on the last 4 million acres planted on "marginal ground", just make it yield 90 bu/ac and then keep the balance at the trend yield. You will find it just doesn't matter much to the whole picture. 50 bu below trend for 4 mil acres is only 200 mil bu out of a normal 13 Bil. A rounding error. In 2012 the problem with yield will be the millions of good acres that makes 100 , not the marginal ground. jmo
08-01-2012 07:36 AM
Time, I agree with hobby on this one. Personally I believe USDA projected 166 to keep grain somewhat cheap for a portion of the summer all while our stocks were historically low. We have had 3 sub trend years in corn if you count this one. When you sit down with your crop insurance agent at the beginning of the year you don't base your insured acres on trend yields, its your 5 year average. Why shouldn't USDA figure Americas corn crop in the same fashion? Sure we have better hybrids but if you take a look outside they all (the improved hybrids) bit it this year. Some of the worst looking corn in my county is a certain companies "drought tolerant" corn. We were in trouble moisture wise in mid May and the market seemed to follow 166 all the way till mid June.
08-01-2012 08:17 AM
Blacksand - are you referring to "DEdrought resistant corn seed? I have some test plots with the Dek and so far the corn is taller and looks better in Van Buren county in SW MIch. but school is still in session so I'm not going to make any positive remarks for at a month. As of today, I'm hoping for 75 bu. average. I don't have the stomach to go driving around on any crop tours this year.