07-11-2012 07:12 AM - edited 07-11-2012 03:32 PM
Sorry to "jump off the grid" a while earlier. Had to go have the optometrist tell me how blind I'm getting!
At any rate, looks like traders feel like either this corn yield number's not low enough, or they had already factored it in, because it sounds like they're focused more exclusively on the lower demand numbers, and that's got corn futures slipping. Nearby's down 12 1/2 cents at $7.05. Beans are hanging on to slight gains and wheat's followed corn lower.
So, which is it? The interesting thing is that both yields and demand were lowered this morning, but only one side of that equation seems to be being traded right now. So, will it even out?
Here's some interesting info that Kevin Penner of AgTraderTalk.com sent me earlier this morning -- these charts show how much USDA adjusted production, acreage and stocks numbers from their June estimates. Pretty dramatic shifts in the production numbers alone. What do you think?
We're still hovering around 20 cents higher for corn, 30 cents higher for beans and 15 cents higher for wheat. Looks like that could be the pace of the day, maybe.
So, was this 146 number a surprise to anyone? Just saw this report that shows a lot of traders were somewhat caught off-guard by that number, being a full 20 bushels/acre below last month's USDA estimate. But, you all know what's happening around the countryside -- did you think USDA might wait until August to reflect the declining crop conditions? Sounds like that's what a lot of traders expected. Hmmm...
Just also heard that the yield adjustment made in today's report is a record.
Nearby corn's 23 1/4 higher, nearby beans are 31 1/2 higher and wheat's 17 3/4 higher.
So, at these prices, are these USDA numbers already factored in -- and have sort of "come and gone" already -- leaving prices to trend higher at about the clip they were before all the profit-taking and positioning yesterday? Are we back marching to the beat of Mother Nature again?
Well, 146 is USDA's magic number for corn yields. Too high, you think? Just talked to one analyst & trader who said though it's a little high, it's still a bullish number despite the cut in both feed use & exports. Here's more from my conversation with him.
It's enough to boost prices, for sure. Corn, soybeans and wheat are all trading just shy of 30 cents higher. Here's the latest.
More in a few!
Good morning, everybody. Well, the Dayquil's flowing and the coffee's hot...everybody ready for what we're going to see in a few minutes? I was just looking back on our site here and found a poll we created a few weeks ago about USDA's yield estimate and whether it'd be above or below 158 bu/ac for corn. Pretty safe to say that one's easy to guess now! But, how much below 158 will we be today? Sounds like anything between 120 and 145 is pretty much fair game.
We'll find out here in a few...in the meantime, the grains turned slightly higher -- Corn's just over 8 cents higher, soybeans are just over a cent higher and wheat's a little over 8 cents higher. So, sounds like the profit-taking's been done and is over with. And, judging by this report, it sounds like traders are "cautious" ahead of this morning's report. In other words, nobody really knows what the heck USDA's going to come up with!
So, here we go!
Agriculture.com Multimedia Editor
07-11-2012 08:41 AM
The USDA would've done the nation better service if that starting yield would've been more realistic to start with. With record acres (fringe acres included) that 166 was never attainable. We would've had higher prices for corn and lessened demand already. Of course, I would've sold my old corn a long time ago and not had any left to sell at $8.
The rationing of corn has started much later than it should've and at a much higher price as well.
07-11-2012 09:11 AM
USDA is like a 1 month lagging indicator. They did the absolute minimum cut with yield # they could get away with & still have a percent of credibility, by coming in 1 bpa below last yrs final - they're pretty smart afterall!
Their # has nothing to do w/ reality now. They simply knew they had to illustrate that this year is worse than last. Not 1 ioda more. still very far from reality.
07-11-2012 11:59 AM - edited 07-11-2012 12:05 PM
I don't know this sell off looks pretty strong. Not sure how low it will go but you have to wonder if something has the market spooked. I imagine the 146 was already priced in.
Also I've said this before and it bears repeating. Without $100+ crude oil you have to wonder how far this can really go.
07-11-2012 12:04 PM
Hey, thanks Glen! Just trying to keep everybody in here honest! An almost impossible task! Ha!
So, they're booking corn profits and running, it looks like, eh?
Agriculture.com Multimedia Editor