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Veteran Advisor

Re: Floor Talk June 14

Anybody in northwest Iowa impacted by this CME Group announcement:

 

Pursuant to CBOT Rule 701 (“Declarations of Force Majeure”), the Exchange is hereby declaring a condition of force majeure at AG Processing, Inc.’s (“AGP”) soybean oil facility (facility #2220) located in Omaha, Nebraska, effective immediately.  AGP’s soybean oil tank at this facility requires repairs and therefore will not be able to load out soybean oil until the necessary maintenance is completed.
 
There are currently 466 registered receipts outstanding at this facility. The following applies to these receipts:
 
1.     Current outstanding receipts will continue to be deliverable through all relevant delivery periods while the force majeure is in effect.
 
2.     If the holder of an outstanding receipt chooses to take load out during this period, AGP must provide the holder with soybean oil at another one of its regular for delivery facilities with compensation to be made to the receipt holder for any additional costs due to loading out at one of the alternative regular facilities.  AGP will make soybean oil available from one of the following regular for delivery facilities:
 
·         AGP – Emmetsburg, IA (approved to issue 1,466 receipts)
·         AGP – Sheldon, IA (approved to issue 320 receipts)
·         AGP – Sergeant Bluff, IA (approved to issue 350 receipts)
 
This condition of force majeure will remain in effect until further notice from the Exchange.

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Honored Advisor

Re: Floor Talk June 14

Jec22,

 

Your right the real issue is the weather and where the crop is in trouble this year.  

I was just pointing out that the market has not traded your reality yet.  The end users who hedge their purchases may get caught loosing eighty cents to a $1 having to roll into september just to watch it run back up on the eventual weather market move.

 

The trade and usda have come to depend on the crop majic as you say, but the producers know what it takes for a good corn crop.  That is why they are questioning usda's rosey glasses. 

I think your odds are a little high.  When the west is dry, irrigation picks up the slack.  When Illinois east is dry----------.....<<<<

The irrigation acres to total acres ratio comes into effect.  And when we are projecting record acres the yield will be more affected by drought.  We might be able to raise 160 bpa in a dry year on 80m acres or less because of choice ground and irrigation.  

Trends do not always go up especially when we overplant.  And the Prices of the last couple of years say we might have.

I can see your 60% of 145 area is not a bad one with another week or two of spotty rain.

The basis ratio just shows how much the market is not believing it yet.

 

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Veteran Advisor

Re: Floor Talk June 14

Here's what the radar looks like this afternoon:

 

InterRAD.gif

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Honored Advisor

Re: Floor Talk June 14

Correction Jec22,

My last sentence should have said old/new crop ratio---------not basis ratio.

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Veteran Advisor

Re: Floor Talk June 14

sw, another concern.   Corn likes warm and humid.  There just isn't any humid this year.  Almost unheard of in Iowa. Maye that could be good, stop some of the diseases.   Remember spider mites?

 

Though the cattle guys have next to no pasture left.   I would cut my hay to make it rain, but it would have to  grow enough to cut. 

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Advisor

Re: Floor Talk June 14

Ray, the prediction that nc crop will be "online" in 75 days (there better be corn tasseling in southern illinois for this to happen) is possible, but doesn't that just keep moving the same situation ahead for the same argument (and inevitable supply debate) ? If we start grinding thru our 14 billion bu. corn crop 6 weeks early are we destined to endure this "running out" scenario again next year. Especially with more normal crop development. We never seem to run out, but the wet fall of 2009 was as close as I've seen. soy processors were literally down to the sweepings before we got going and local feed mills were really paying a premium for us to dry 30% corn for right now delivery. 2013 will be interesting as well. Hold on boys!!

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Highlighted
Veteran Advisor

Re: Floor Talk June 14

You are correct......we have been in the robbing Peter to pay Paul mode for a couple of years.....I believe that huge increase in feed/residual that was published in May was being counted on to solve some of those issues....so if we have another subpar corn crop, we keep kicking the can down the road....and if we end up with planting issues and a late harvest---well, we are going to be in the soup like 1996........

 

this Illinois silking projection is a good news/bad news story.......it means an early crop, but it also means it will need lots of water in the very near future, so it's vital some of this moisture gets east of the Miss River...

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