Marketing

[ag-?]

If we see reduction in corn yield like that could be coming the draw down on all grains is going to be significant. Here in ND the local markets haven't shown any increase in like barley feed prices but I think the demand side is still trying figure out if this weather market is for real or market just crying wolf to much and there will be enough supplies. My gut is telling me when demand side does realize that supplies are going to be scarce that inventories are going to disappear very fast. In 2008 when quality wheat was short demand didn't disappear only got more intense price didn't matter but access to the commodity was. I think we're going to see that top end of demand will disappear but there is large amount of demand that will continue to buy grains even at levels no one would ever thought possible.. I think the top end demand yield has been lost and now wre getting to point that loss in yield Is whether this loss can be made up out excess supplies in other grains. If my gut feeling is right I think we could be point of demand for different crops is going create large price inflation until inventory can be obtained even from worldwide. We may even see if worldwide inventories are actually what they are. Also this may take more than year to recover inventories for all crops. The weather forecasts are not changing with hot and dry in the next two week forecaste so crop conditions are going to continue to slide. It's going to be interesting coming year.

[c-x-1]

if demand side hasn't figured out this prod loss is for real yet, that tells me it's simply more fuel for upside when they do figure it out.

[Palouser]

I haven't seen a single time the 'market' (futures) was ahead of the game, or even on top of it, when supplies were cut because of weather. Not in 2007, not during the Russian drought, and I don't think now. Demand will vary little, except the possibility of ethanol if the mandates are changed due to political considerations.

The 'market' is a lagging indicator. In the very short term it can even be misleading if taken too seriously. In the long run it is simply late to the party.

[Jim Meade / Iowa City]

How do local markets react to variable supply?  If MN grows a big crop, will their local markets go up just because IN didn't, or will some of that corn be cheaper to use at home rather than rail down to IN?

Will we see much variation in the cash market, or will prices level off pretty well (allowing for transportation costs)?