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09-20-2011 07:13 AM
Last nights ratings numbers were good for all. What stands out to me the most is the change in G/E Ratings in soybeans for Minnesota. Down 10. Ouch. Minnesota is the third largest soybean state.
These negative numbers, Corn was rated 51, down 17 from a year ago. Beans 53 down 10 from a year ago which is an 8 year low.
Macros will help. Things are green at the moment. Stocks, oil and gold.
Lets get after it.
09-20-2011 07:33 AM
We're in a two tiered trade week.
Mon & some of Tues needed to sweep up volume off last's weeks lackluster deal.
Wed thru end of week for this week's trade.
Should be a relative strong week for several products / markets thereof.
09-20-2011 08:00 AM
Bean ratings don't surprise me especially for our NC Iowa and S Minn area. Between us and Minneapolis, you can hardly find a bean field not affected by the frost. The tops are burned off. That has to have an effect on yield. From what level to what level of yield..one will be probably never know....MikeM
09-20-2011 08:05 AM
I think you guys are probably the best informed in the trade. You have your feet on the ground and are the owners of the underlying. These ratings for corn and beans I think will help to build a price floor. I am not saying we are going to the moon but it will be more difficult to break.
The CCI is a good index. It looks to be going lower.
09-20-2011 08:23 AM
With a shorter crop, increased demand, and worries about shortages, do you see ethanol policy kicking into high gear? One group is saying Tuesday that they thought corn would have to go to $8-$9 before any ethanol pullback. However, they say shortage concerns have risen and corn has surpassed that price level needed for the gov't to start zeroing in on ethanol. What do you think and what do you hear, Scott?
09-20-2011 09:16 AM
Heck..... Let the price of corn go down..... Just makes it more likely the Chinese will buy more corn that we do not have...... It is almost like the Chinese are hoping for a collapse in the EU then they can buy cheaper?.....If not hoping for a collapse but at least the threat of one.............p-oed
09-20-2011 10:18 AM
With the government ending its policy for subsidies on corn destined for ethanol at the end of this year, I am not sure that the government feels that they need to make any further moves to shift crop allocation to feed grain and other uses.
09-20-2011 10:31 AM
I'd venture to guess the gov't will allow the subsidies to expire, and then they will take a wait and see approach. If things get out of hand, they will eventually play with the mandate numbers. The numbers coming out of the ethanol sector suggest if the subsidies are allowed to expire that E10 will be higher priced than regular unleaded gasoline. This thing may sort itself out which is why I believe the gov't will be extremely reactionary in here.
09-20-2011 11:25 AM
I would have to agree with you Husker on the ethanol picture. Right now I think the government will let the market be and take a wait and see attitude after subsidies expire. The real threat of higher corn prices seems to be that of the demand coming out of China. Looking forward, it appears that Chinese demand will only increase as supply outpaces demand with China becoming a major importer of the grain by 2015. How much of an absence of gov't corn subsidies in the US will lift some of the pressure on a depleted supply remains to be seen. As we look back at the market in commodities in general, when there are sell offs they tend to be buying opportunities.
09-20-2011 11:32 AM
With Vetec sunsetting in Dec one thing is certain the average consumer will pay more for gas. The gasoline blenders get the credit NOT the ethanol industry. Anyone living in the city will pay more to commute to work. Maybe the gov't should end the over a BILLION dollar a day subsidy for the oil industry, that would save the tax payers a lot more money. 356 Billion times ten years. Hold on here you could almost balnce the budget just by ending their subsidies which some started in the 1920's. Isn't it great the ceo of EXXon makes over 30 million a year and still rakes in huge tax credits from the gov't . What was our GDP loss in the gulf of Mexico over the Deep horizon oil spill. A lot more than the 6 billion spent on ethanol to keep your air clean in the cities. Better wake up people!. At 7.50 corn it costs 33 cents for feed to get you 1 lb of pork chops that cost the consumer $3.90 a pound. Or 13 cents of corn in a 16 oz. box of corn flakes that cost the consumer $3.85. Corn wheat and beans are very cheap for what the consumer pays for end product, the farmer gets less than 16% of the food dollar, in 1982 the farmer got 32% Who do you think gets the other 84%? The grocery manufacturer and retailer. The ones screaming corn is to high. Want to raise more food RAISE the price. Lower the price and you will eventually starve... The US exports more grain than any time in history. Want mor grain to stay here , raise the value of the dollar. The Chinese don't care if Americans starve, neither do the sheiks in Dubai. What are you going to do Mike when they move the CBOT and CME to the middle east and trade electronically