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11-21-2012 08:35 AM - edited 11-21-2012 08:36 AM
As an Iowan, I'm always bemused by the talk of corn acre shifts, although I'll admit I've been playing games with corn/bean percentages myself. But, the progosticators are out already talking about the amount of corn needed to meet the assumed demand (a highly variable number) as being a product of yield times acreage. Duh.
What do you see for a trend line yield? This paper picked 162 as the mathematical number and then wonders how to adjust it for weather. They have two alternate scenarios, 5 over and 10 under.
For me, it doesn't make much different. I know within 35 acres of my rotation right now. The last field will be decided in the spring. So, to some extent, the trend line or any other projected yield doesn't make much difference.
Oh, but it does, you say. It is important marketing information. yes, I suppose it should be an 5 years ago it would have been. But, I'm 5 years older, I'm closer to retirement, I'm not interested in any big marketing risks, and I'd rather take the chance of missing a sale than making one I later regret. Why, you are being more speculative by staying out of the market. Hmmm. Yes, to a point that is right, but to some extent I'm just moving from pre-harvest marketing to post-harvest marketing. Among the factors invollved as I get close enough to at least contemplate retirement are trying to balance my defered taxes with income so I don't get hit with a huge tax bill the year after I quit.
Anyway, there are many more factors in the equation than just trend line yield or price.
The job of the corn market is to motivate the "correct" magnitude of planted acreage in 2013. To that end, the market will continue to assess demand prospects and prospects for the 2013 growing season. It is problematic, of course, that acreage decisions have to be made before either demand or growing season weather is known. Given the yield shortfalls of 2011 and 2012 and on-going drought conditions in much of the U.S., the market may need to reflect expectations of a below-trend yield in 2013. The current price of December 2013 corn futures, near $6.25 per bushel, is consistent with this scenario. It is important to recognize that even under this scenario planted acreage will not need to exceed that of 2012 unless demand is stronger than currently anticipated or historically large yield concerns persist into the spring.
Issued by Darrel Good and Scott Irwin
Department of Agricultural and Consumer Economics
University of Illinois"
11-21-2012 08:51 AM
Informa started with 178M acres total corn+beans and split them 98.5 and 80. Given the ratio of prices it seems to favor corn. Without major weather problems in South America we certainly don't need 80M bean acres. Dry weather will have an effect but it also minimizes prevent plant acres in the Dakotas.
Add all this up and I wonder if we are not headed towards 100M acres of corn for 2013?
11-22-2012 06:14 AM
11-22-2012 08:02 AM
Well, that still gets us a 13.3 byn crop in 2013
that's a reasonable start to rebuilding our demand base
but fully agree we might be "feeling the tire rub on the fender wall" several times before it's in the bin next fall!
11-22-2012 08:15 AM - edited 11-22-2012 08:16 AM
Any early estimation that ignores the last 2 years of history, thinking it won't effect 2013 yield, is not realistic. At least until we see some major weather changes.
I thought hurricane season was our first possibility, and country wide, that was a fizzle.
This warm, dry, and windy is different than last winter but not better.
An elevator in the okla. panhandle is tracking local rainfall for the last 3 yrs on their bid board------on a yearly basis and monthly for the current year---------it is shocking to look at----------- around 6 inches annually and month after month below 3/10.
Bookkeeper notes that, even with these prices, farmers comment on that data more than the bids.
Ya gotta raise a crop before ya can sell it.
11-22-2012 09:31 AM
11-22-2012 11:40 AM
Just so you all know, I just took that picture 11:15am This morning. That is a 15 inch Crescent wrench in that crack.
I'm not sure but what it isn't a new fault opening up here in South Podunk Country. Only the bottom ground is in good moisture shape for next year, the upper ground has a ways to go.
11-22-2012 08:07 PM
Holy cow! You got a crescent wrench to sprout! That must be good dirt, my emergence on crescent wrenches and hammers is much poorer. I plant plenty, and at different seeding depths, but nothing seems to improve the emergence.