I have been reviewing the corn and coarse grains situation in the WASDE. The world carryout in corn last year dropped by approx 1billion bushels. The coarse grains dropped approx 1.2 billion bushels. This is on top of record SA production in 2017 and the US production in 2016. The US didn't do too bad in 2017. Virtually all of the reduction of corn carryout occurred in China and most likely most of the coarse grain reduction. Right now, China is in the process of cleaning us out of sorghum, likely because they can only import 3mmt of corn tariff free. The top China guy got rid of the VAT on DDGS going into China from the US-I don't think he did it just because he liked Pres Trump. The WASDE raised corn for ethanol 50 million bu this year, not because we are producing ethanol at a record pace, but because sorghum was too high priced to use it for the grind. The WASDE also raised the sorghum exports to China by 50 million bus. They have yet to raise the corn numbers for the high ethanol production. This week, Sino-grain(?), the grain storage people for the Chinese gov't is to start selling corn out of their reserves because the price of corn has reached a 2 year high there. That's 3 months after harvest. The Chinese crop reporting agency put their 2017 corn crop at about 211, but our USDA raised the production number to about 216. Just giving a little background from China angle.
SA is having some problems with corn-dry in a sizable area of Argentina (but going to get rain this week!?), while Brazil cut back on acreage because they got their head handed to them on a platter when it came time to market last year. S Africa is having heat and dry weather-however they raise mostly white corn. Chartwise, the dollar will likely go down to around 85-88 area, from the present 91-92 area. In the US, wheat ground lost to acreage or winterkill may go to sorghum or something else other than corn. Spring wheat acres in N Dak may rise at the expense of corn. Down south, cotton is king again.
In summary, China is chewing through their corn reserves at about 1 billion bushels a year. They are also ramping up ethanol to clear their air out. Brazil is also going to use more corn for ethanol-cheaper than shipping across country. They don't have a Mississippi. Corn may be the sleeper this year-China can't just keep on going through that much corn, regardless of who says how much they may or may not have. I wouldn't think 2014 corn would be in very good condition. We'll have to see, but I'm ready to jump into corn depending on the 1/12/2018 WASDE
BTW-Jim M-When I was in grade school 50+ years ago, we had to learn the metric system, because the US was going to go along with the rest of the world. I'm still waiting.(:~)
