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Corn Again

   I've been reading recent posted comments on corn crops conditions on this site-some very insightful remarks.   Does anyone have a handle on unplanted acres/switched acres this year.   It sounds as though PP acres are going to be a much larger number this year.   The wire services just reported that Canada will have 700,000 hectares of unplanted ground this year because of excessive rains.(about 1.75 million acres).   Its been pretty hard getting a handle on the wheat this year with the early drought, snow storm and disease in western Kansas along with lots of rain/storm damage on the soft red areas this year.   Chicago is being pretty quiet about all of this, which leads me to think the damage is alot bigger than they want to think-kind of like holding their breath.

   As far as corn-the crop has to be running behind last year because of late planting/cold etc.   Its appears that a fairly large number of acres needs to be replanted, which will take away from yields, not counting unplanted or switched acres.   We don't have a lot of "wiggle" room this year as a 10bu/acre drop will drop the carryover to 1.5 billion or a 4million acre drop will do the same thing.   A combination of both will light a fire under this market.   It seems that the market is digesting the Brazil crop numbers right now.   Brazil will likely impeach another guy, which shouldn't be too traumatic on the real because they've been through it before.  It may be bullish as things are getting straightened out.   I think the WASDE is over estimating China's corn carryover by 10mmt, and will have to drop it to 70mmt at some point.   For the last three years, they have increased corn usage by about 16mmt/year.  This year the USDA says 6mmt?   China put an import tax on DDGS, which they were using in animal feed.   Recently they exported 10x the ethanol the did the prior year?   It certainly leads one to believe they are grinding corn for the DDGS.   The recent Climate Prediction Center has put excessive heat into the international threat outlook for much on northern China for the next two weeks?   For a little frosting on the cake, the COF had placements at a 14 year high.   Large fund shorts at this price?   Chicago is holding their breath.

 

 

 

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3 Replies
Honored Advisor

Re: Corn Again

The Chicago traders are not holding their breath.   They are strangling the farmers.      Smiley Wink

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Honored Advisor

Re: Corn Again

as mentioned in another thread.

 

The corn issues and the increasing cattle placements do have a few nervous.

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Veteran Advisor

Re: Corn Again

Producers have a wonderful chance to take advantage of the information they have and which the traders seem to be ignoring.

 

How are we going to use that info for marketing new crop corn?

 

1.  We could buy futures or sell puts right now.  The plan would be to redeem them or reverse positions when prices get higher when the trade "wakes up".

 

2.  We can sit tight and sell our grain at higher prices.  That might be a weather rally this summer and it might be a rally next spring.

 

3.  When prices go up we can sell the board or buy puts.

 

No one seems to be talking about selling corn yet.  I sold a little for Ced delivery many months ago.  I wish I'd sold more.  But I'm not thinking of selling right now.

 

However, I am aware that sometime the price will break.  I don't' want to be too late.

 

 

 

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