Reply
Contributor
Posts: 13
Registered: ‎05-15-2016
0

Looking at corn

Well, another WASDE has come and gone.   Ho Hum-another bump up in world carryout.   SA corn estimates raised 3mmt.   What should happen in the next WASDE is of interest.   The attache in China has stated two days before the last WASDE that the corn carryover will decrease 7.5mmt this year to around 95mmt and next years carryout drop a whopping 25mmt to about 70mmt. That is estimating a 6mmt increase in China corn usage whereas the last two years it has increased 15mmt/year.  Leaving all else the same, May's WASDE world carryout should drop to about 190mmt   Some interesting points-the USDA projects Brazils Corn crop at 93.5 even before it pollinates, whereas in the US-crop estimates don't take place until after pollination.   The USDA got burned last year as the first projection was 86 mmt and the final one was 67mmt.   The long 11 to 15 day american model forecast for Safrina crop in Brazil is for dry weather, whereas the european is for some rain-weather gurus decided to go with the european for now.   Our projected carryover is basically the same as last year. provided we get a trendline or better and the SA crop performs as projected(due to lower US exports).   5 years in a row in the US doesn't seem likely, esp if planting delays develop.   Kansas, S Dak and N. Dak have to perform as well this year as last.   10 bushels below trendline in the US drops about 21 mmt from the world carryover to around 170 with China holding about 70..Another item to look at is the rising Real-around 20% higher than a year ago.   There's a reason why Brazilan farmers are reluctant to sell-could and probably will send business to the US.   Trump and XI made some sort of deal with N Korea as the focus.   Xi said China would lift the import ban on US beef and buy more american grain.   Today the ban on american beef was lifted....   Perhaps China does not want 20 million hungry N Koreans surging across their borders?   Also funds are short 150thousand cars of corn-- in April?   In addition, the Trump WH has not said no to the ethanol issue raised by Ichan.   This corn market has some explosive issues in front of it-what say you?

Advisor
Posts: 574
Registered: ‎10-18-2016
0

Re: Looking at corn

It is certainly possible for corn to have some explosive moves but unless something extraordinary happens it doesn't seem likely to me.

 

We should all have a plan for how to handle a black swan event, but it is also a challenge to make money if no black swan occurs.

Esteemed Advisor
Posts: 2,333
Registered: ‎04-29-2011
0

Re: Looking at corn

[ Edited ]

The USDA has already predicted this year's USA corn crop.....(did you miss that report back in March?)........Planted acres and yield have already been fed into the system. The carryout numbers are predicted to rise,  even though most of the seed is still in the bag.   Have you checked the markets lately?  The traders and end users are very complacent on our food supply.  Something extraordinary happening doesn't seem likely to most people.  Smiley Wink

 

 

 

 

 

Senior Advisor
Posts: 971
Registered: ‎05-20-2010

Re: Looking at corn

I'm certainly in your camp voltzy, just think the fireworks might have to wait to 2018. This year or next is fine with us.

 

If I read one more farm mag article encouraging you to sell at your cost of production or a few pennies above....ridiculous. No one studies history anymore I guess, even though it is free on the internet.