01-11-2013 11:35 AM
As you say it is good now. This is on a limb, but I think wheat is our key. The feeders need it to get through the year(at least some of them do). We could yet see wheat push this market along and if it goes up corn will get drug higher at least some. But Basis, might ramp up at the coop some but probably not at the end users.
New crop is another thing. I look for basis to improve some as grains get in shorter supply this spring. Especially if the producers see stability in prices. That carry out number says even with SA production-----usda expects supply to stay tight.
just opinion--------------------today-----------------maybe this morning only.
01-11-2013 12:24 PM
Our basis levels are pretty good right now at 21 cents over Chicago. I think in less than 2 weeks we may see 31 cents over Chicago at some of the ethanol plants. The ethanol plants in Northern Iowa generally have the best basis levels over the feed mills and the local elevators. If it hits 31 cents over Chicago, this will be one of the best basis levels at this time period that I remember. This should tell us that corn demand is still very good, at least in my area and the end users will have to bid against each other to get cash corn. Our Northern part of Iowa probably lost at least 500 Million bushels of corn to the drought. Even in a good year, every bushel of corn is needed to meet the demand from the ethanol plants, feed mills, elevators, and the 15 Million hogs that Northern Iowa feeds every year. It will be very interesting to see what basis levels will be in 2-4 months from now.
01-11-2013 12:27 PM
trying for once to learn something from this report and the main picture that keeps jumping out at me is -------- $7.5-8.00 corn did not slow usage like I expected. Feed usage is still there even though we know animals to feed are is short supply.
If the export/lack or exports didn't slow ending stocks decline, ethanol has not shut down/ or at least has leveled off with solid production. We may not see surplus grains for a while. Regardless of the ongoing drought or wet year approaching. Just seems to me to be a pretty strong positive feeling from this one. Not earth shaking but as good as a grain producer can expect.
Side note ----- At line at the dumping place yesterday----------grain end user , not the bathroom.-------------------anyway noticed that wheat trucks are dumping also. Odd for this time of year-----with corn as available as it is going to get.