09-24-2013 04:25 PM
,All season, farmers have been bad mouthing and decrying the yield potential. Now it looks like maybe everyone is becoming willing to admit that maybe yields are a little better than they'd been willing to 'fess up to.
When you say the yield is worse than it is, do you market your own grain based on what you tell others? Or do you market your own grain based on what you know to be accurate? Or is it possible that some didn't even look at their corn and although theysaid yeilds would be bad, actually didn't have a clue?
Just curious how members have been marketing the "no corn" message?
I've had lunch with more than one farmer who was sure that corn would go higher in August and September. They aren't quite so happy now. If indeed the carry out is as big as the bad guys are saying and people weld the bin doors shut, it might not be worth getting the cutting torch out by next August. It may not be worth anything.
09-24-2013 05:03 PM
I don't know if projecting to next August is really worth it. Too many factors to be decided before that point. There still has to be a good crop next year. One can't really count on positive factors until the crop is planted, when it's planted and the various conditions that follow. It's in the realm of possibility that those who keep an ace in the hole could have the last laugh.
On the other hand, after all the scorn heaped on the USDA there might have to be some grudging respect in the end - not that anyone will volunteer that if they were the pushers of conspiracy theories. I do know that I've never been surveyed so often on yields, prospective yields, storage capacity, and amounts stored from this year and last year. That's a change and I expect the USDA should have more confidence in those areas.
09-24-2013 05:09 PM - edited 09-24-2013 05:11 PM
I know you were not trying to help us Chicago Traders out but thanks anyway. This whole season I have heard "Those Chicago Traders don't know squat about what is happening on the ground". Well looky here.
Who said to trade your back yard?
09-24-2013 06:15 PM - edited 09-24-2013 06:19 PM
Jim, thanks for calling them out. Now in respect to those that were never able to plant a crop, zero still means zero and it doesn't get any worse than that. For the most part, farmers in Iowa and Minnesota have enjoyed good growing seasons with high prices over the past 2 years. Farmers in that region need to remember that to get those high prices it came at a cost. A good chunk of the other 73 million corn acres in the US got beaten up pretty bad over the past 2 years. I remember talking to an Iowa farmer last year over the phone in August, and he guessed the corn in his area would yield around 50 bu...... Dubuque county, where this farmer was located averaged 149 bu. in 2012. I guessed my corn average at 50 bu last year and it averaged 52. Sometimes I don't know if guys really don't know how to guess yields or if they are just trying to talk up prices. I have to admit, all the doom and gloom talk has kept me out of the discussions lately.
09-24-2013 07:43 PM - edited 09-24-2013 07:45 PM
Going to the other extreme might not be the answer. Your a day or two older than me Jim. In your lifetime have you ever seen corn "not worth anything"?
The main complaint has been usda's prediction of crop acres and bushels in January and March. Your price example prediction for August 2014 is as foolish as theirs. I will complain about both.
My guess is one of you(Jim or usda) was probably not trying to influence the price of corn this last spring.
Of course we could always cash it all in at harvest and see what our $$$s are worth next August
09-24-2013 08:27 PM - edited 09-25-2013 12:42 PM
Jim, I find it interesting that you feel we already know the outcome of the 2013 U.S. Corn crop when the crop progress report of 9-22 shows just 7% of the U.S. Corn crop is harvested with much of that from states such as KY and TN and other southern areas where USDA is projecting many record state average yields.
I do not doubt that many good yields are out there and that some may end up surprised to the upside on yields but I believe it is way too early to call the level of production we will see from this crop as well as pricing opportunities out to August of next year.
I personally have a 13.165 2013 U.S. Corn production estimate which is a new record but I am not in the camp of some who feel that demand has little chance of reaching or exceeding the current USDA estimate of 12.675 billion bushel. If prices hold at the current levels on cash corn vs.. the price of crude oil and the South American acres fall as much as some forecast, price advances into the area where net prices (after interest but before on farm storage costs) might well exceed the roughly $5.50 price for harvest delivery on northern U.S. area 2013 corn that many producers have had a chance to lock in since March. $5.70 DEC 13 futures less a ($.20) basis is how I arrived at this price.
JULY 14 futures might well see a $6.00 on them and with a ($.20) basis could net a producer $5.80 so this is $.30 above the best price available since early spring (less $.15 interest to hold 8 months) and is well above the current $4.30 cash price.
Time will tell the tale on this.
If I knew for sure, I would not be working for a living.
09-24-2013 09:35 PM
I have to admit that I am amazed at how this crop has thrived despite late planting, flooding, loss of N, and mid thru late season drought. My corn is going to be prolly 20 bu better than I would have guessed 6 weeks ago, and I have been walking fields every few days all summer. Having said that, the average for my part of central IL will be below APH by 10 to 20 bpa, and we are supposedly in an area of excellent yields. A sub 13 Billion bushel crop still seems to me to be the most likely end result, and I have to believe that by the time we refill the completely empty pipeline and rebuild demand with the current low prices, carryout will drop below 1 Billion bushels, and we will have another opportunity to sell this crop for something in the area of $6.00. I also think that there is a good chance that the basis wil do most of the heavy lifting rather than the CBOT.
09-24-2013 09:58 PM
Mr Palouser- FWIW "There still has to be a good crop next year. One can't really count on positive factors until the crop is planted, when it's planted and the various conditions that follow."
1 Every year ned a good crop.
2 We don't count on anything, we use odds. IE of 8 yrs 1 will be very poor, one above avg (above trend), one near trend, one just either side etc.
3 Good thinsg can happaen not just bad . Do you know that ?
4. If a producer waits until "the crop is plantedd, grown and in good shape IE 2013 slightly below trend), the price has bled out the uncertainities. that were built into price permia, spring. The SEASONBAL is top in late spring, ss teh crop grows and realizes, price drops.
5 Few I know of can afford to await full knowledge and the nmkt. On avg a loser.
Theme is I DON"T know, am NIT trying to be a hero, so I scale sell, some in late spring, some in mid June, some in teh fall and some in jan and some in march again. or something like tht.
Look at CHI wheat, going down for 2+ yrs. Someone is earning that pemia melt, the producer or a spec?
09-25-2013 02:18 AM
I do not play the odds over a long period of time. I collect the info of reality on the ground as it comes in and 'count cards'. Then play the trends as they develop. You cite the last two years in wheat. Not good enough. I've made plenty by not following seasonals as signals dictated. I capitalized as an opportunist. You know that. I know that.
The other obvious strategy is to use the 'seasonal' trend to bypass the lows and sell on the highs further into the marketing year - which has been a very good tactic, when knowing that supply trends backed that. Look at crop year prices and see the inclines.
This year changes? Adjust. You have to understand when the Russian drought changes the pattern, or 2007-8 comes along. You talked that down.
Specs can do whatever they want. They don't really matter to supply and demand.