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Veteran Contributor

Carryover staying near 750...theory of how

Bear with me but this is my theory. Most of America was out of corn last august 1. 10-12. % of a 10.7 billion crop was picked in august or marketing year 2011-12. So we have 1.1 billion bushels off year . NASS has a question for producers about old vs new crop on Sept 1 survey but it is stocks on hand. We as well as a few hundred thousand of our closest friends delivered this august corn to end users who paid +40 to get it. I n our area it was loaded direct on a barge ,moved, and fed to poultry as it was brought in. This corn is now nuggets and litter. It is not counted as stocks on farm or commercial. It is also never taken off 2012-13 projected carryout # s. We have talked this before, but it has never been answered.
Next issue, basis is higher than ever and they say we didnt feed anything 2nd quarter and stocks are now "normal". Here is the theory. NASS sees no exports and assumes that the corn is on hand based on history of farmer storage . End users know they can't source corn because they raise basis and it didn't work so they cannot export that what they don't have. WASDE has a different set of #s to work with than NASS and will come closer to true carryout of stubborn old farmers who hate taxes more than they love income and will hold the 600-700 million bushels even if we are starving.
They have kick started demand on a crop that didn't exist and we will have a Minnesota wheat type situation this august as corn is not harvested in August this year because of cold
How sure am I? I hedged (puts and cash)75% of projected corn around 5.90$. So not sure enough to risk the farm but I think my puts will be worthless in august.
The slingshot got pulled tighter so when it is released the rock will go farther. Buckle up and get ready for one more summer of grain roller coaster because the govt isn't manipulating the numbers as much as not knowing which questions to ask to get the right answer.

Back to corn planting, my projected 30° low from last night is now 25° reality. Do you think the weather forecasters are manipulating my planting window? We shall test emergence capability this week.

Point out my errors. I am a big boy
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8 Replies
Veteran Advisor

Re: Carryover staying near 750...theory of how

Smiley Happythe only thing I see fringe, is from what i've been told, you don't plant corn seed when it's 25 degrees.

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Honored Advisor

Re: Carryover staying near 750...theory of how

Fringe,    That may have been the most sensible post of the year.  I think you have nailed it my friend.  Think back to last summer when everyone was saying to look for the blowoff top in the corn market......To my recollection, it never happened.     Could it still happen?   We shall see.

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Senior Contributor

Re: Carryover staying near 750...theory of how

I guess I am a firm believer in local basis levels, these really tell the picture of how much corn is out on the farms in our Tin Cans. We have a local ethanol plant go to 60 cents over Chicago after the big report. They were at $7.70 last week, but now they are at $6.87 and a 60 cents over for cash corn during June/2013 Delivery. But they said it could be delivered in the last 2 weeks of May, but still get the June price. This tells me they are having a very difficult time sourcing corn for June Delivery. I believe that local basis levels are the best measurement of the "REAL" levels of on-farm corn stocks. Talking with some of the guys in my part of Northern Iowa, most have absolutely zero unpriced/contracted corn on the farm, or they are like me, just down to gambling stocks which we consider as being just the last 10% and most times the last 5% of your total corn production for 2012. I think it is very likely that we will have alot of local corn stock-outs in various parts of the cornbelt before 2013 crop is harvest ready. I think North-Central Iowa will be one place to watch given that in most years we always need at least an average or a level that is within 10% of normal yields. We have a vast number of local corn end-users such as all the local elevators, ethanol plants, the feed mills, and the big hog guys all trying to source corn. I most likely this possible corn shortage for my part of Iowa will show up when corn end-users may need to go to $1 over Chicago to try and find corn, and with everyone out of corn, even a $1 over may not help. Maybe they will have to try out of the local area of farmers to find any corn before all this is over with 2013 crop in the bin. Yes, I see local basis levels as being the "TRUE" Measurement of on-farm corn stocks. Not what the USDA is saying.

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Veteran Advisor

Re: Carryover staying near 750...theory of how

RSW......which ethanol plant is bidding +60N for June corn??

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Senior Contributor

Re: Carryover staying near 750...theory of how

RSW. When did you magically get sold down to "gambling stocks?"

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Advisor

Re: Carryover staying near 750...theory of how

rsw, i think you are talking about golden grain at mason city. I'm perplexed?  something is not quite right with your numbers as local coops were at .23 over and now ar .21.  39 cents is darn good truckin' for  45 miles.  north central coop is delivering corn to golden grain on a regular basis. Tell us the ethanol plant, the bid, and the month of the bid please. It shouldn't be secret information.  Is it the charles city plant?

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Senior Advisor

Re: Carryover staying near 750...theory of how

HA, Ha, Ha. As soon as he gets asked a legitimate question, gone like the wind. FarmVille anyone?
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Veteran Advisor

Re: Carryover staying near 750...theory of how

Yes, I've noticed that as well

 

second time I asked a question like this

 

and all you hear is ---crickets--!!

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