03-31-2013 04:21 PM
Some years ago I worked for a farmer by the name of Stanley Johnson. He lived north of Paloma Illinois, which is in Adams County (WC IL.). After providing me with his opinion, he would give the following disclaimer. “This opinion and 25 cents will buy you a cup of coffee.” (At that time coffee was a quarter.)
My impression of the stocks report is that it is not bearish. Corn stocks were down 600 million from same time last year at 5.4 billion bushels. The average of guess of the experts was 5.0 billion stocks. The report was 400 million bushels more then expected.
With 6 months remaining in the crop year(from March 4th) there is enough corn left to use 900 million
bushels per month(with no remainder)(5.4 billion / 6 months). Looking at the February WASDE report, the expected usage(feed & residual, food seed industrial, exports) is 11,262 million bushel. Divide this number by 12 and it gives a simplistic number of 939 of average usage per month. I decided to go further and reduce exports from the February WASDE report because according to the last weekly export inspection report currently corn exports are about 44% of a year ago. So instead of using 825 for exports(USDA Feb.. number) I will use 680 million bushels of exports( a difference of 145 mil bushels). The new usage number is 11,117 million bushels, divided by twelve giving 926 mil. bushels usage per month on average. Also the USDA has 632 million bushels of carryout.
According to the last WASDE report, the most recent weekly grain export inspection report, and this recent quarterly stocks number, the USDA will need to find approximately 788 million bushels to reach their 632 ending stocks number.
Referring to the beginning paragraph I will close by saying this opinion and $1 will get you a cup of coffee.
03-31-2013 05:38 PM
couple of things...
we don't use an equal quantity of corn per month, especially for exports.....but since we throttled exports back, perhaps this is the year that we come closer to an equal amount per month.....also expect to see quite a bit of wheat feeding this summer...
corn stocks don't go to zero.....back in '96 we pretty much ran the country out of corn by mid-August with a 500 myn carryout projected for Sept 1 that year....
03-31-2013 05:51 PM
.......interesting, in the physical world Corn is tighter than '96--------------thanks for the straight math saturated.......we've had enough of the FUNNY MATH going around in the "Fantasy corn league."
03-31-2013 06:01 PM
If the price of corn gets low enough we might use more than his average. Also to feed wheat we need a good US crop and the shape of that crop is very much up in the air for now anyway. I guess what I'm getting at is that the situation is fluid nothing is set in stone.
03-31-2013 06:12 PM
Might be a good idea for the Ray Jenkins of the world to get what they need right now while it is still on sale, maybe yet tonight.
I'm showing $7.15 cash local with the 22 cents down right now, about where it was 3 ish weeks ago.