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05-03-2013 04:58 PM
"Even with the Corn Belt’s extremely slow planting progress, the markets aren’t on a straight path higher.
Roger Hugenberg, Ursa Farmer's Cooperative Missouri facilities manager in Canton, Mo., says the 2013 corn crop will have to get a lot smaller before the markets begin to panic.
"The supply of corn is short, there’s no doubt about it," he says.
But, he says, the reality is USDA is expecting 97 million acres of corn this year.
Hugenberg says if you figure 92% of those acres will be harvested then factor in trend-line yields. "We started the beginning of the year talking about a 166 national average yield," he says. "But, you can take that down to 145."
He says that equals about 2.5 billion bushels of ending stocks for this year. "That is about four times as much corn available to market as we have today," he says, which creates some significant downside risk.
The good news, he says, is the market doesn’t need that big of a crop"
Probably a good thing as we are on track to not have a bin buster again, or trendline yields, or 97 million acres.
05-03-2013 08:02 PM
I wouldn't ridicule him to much. Even if you take planted acres down to 90 million acres times his 145 yield you get a 12 billion bu crop which if demand stays the same next year as this year which is estimated to be below 12b bu mark carry over will be about the same.
05-03-2013 08:20 PM - edited 05-03-2013 08:23 PM
I think NDf got prod figured correct, but Roger's calling for 2.5 Bil end stocks?????????????
The misnomer is USDA is saying demand will go back up into "more normal" ranges next year to hide what we don't have this year..............yet Roger is assuming demand remains at these "fabricated" LOW levels of THIS mktg yr.
you have to work backwards to see the slight of hand.
05-03-2013 08:24 PM
I would say that what this guy states is very accurate and part of the reason the market hasn't reacted too much yet. The biggest drop we have ever had (aside from the PIC year) in planted acres is around 4%. 97 million intended and 96% of that planted would be a little north of 93 million planted. 92% of that harvested would be about 86 million harvested. At 145 BPA that would be 12.5 billion bushels. We have a lot of wiggle room before we get into trouble with carryout. It is obviously possible that we go sub 145 and things get tight, but I'm not banking on it yet.