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Veteran Advisor

Re: Floor Talk June 14

The market is doing it's job.......next order of business is to force a big spread between domestic and export values....make that big enough and someone will sell back their export corn and go elsewhere or postpone taking it for 30-60 days...having that big Brazil crop is a plus for making this happen....

 

It's all about "the size of the opportunity"

 

old crop US supply held by thousands and thousands of farmers......I fully expect to see many days just like the last two---ie: pretty sizable trading ranges in the July contract .....just because it's up 15 doesn't mean it has a high range close....when needing to buy corn from the flat price oriented seller,  volatile price action is a key component ....

 

keep ur head on straight.....we're in the 5th or 6th inning, but the last 3-4 could go pretty fast as new crop supply starts in less than 75 days in south Illinois......and with these basis levels, it all should go directly into the pipeline....

 

the biggest question is whether northern half cornbelt ethanol plants can get enough supply to run in late august and Sept...or have to take a timeout.....

 

we'll be talking about this year's old/new  transition for many, many years to come...

 

Ray J

 

 

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Senior Advisor

Re: Floor Talk June 14

China has no problem buying corn off the West Coast when it is up around $9. Still lower than their internal prices. One has to look at where sources are relative to China. Check the Portland Report to follow the price China might pay for corn. Remember, these producer prices FOB Portland do NOT include and expense or margins for the exporters - which can be huge at times. Although the PNW isn't a major producer of corn the irrigated areas have abandoned many other crops to grow a much larger proportion of corn than ever seen before. Since shipping isn't a huge issue out here farmers capture a large part of the premium - and Wa State has the highest yields in the country. The price of Soy arriving in the district isn't published here since we don't grow soy but, safe to say, it would be an eye popping price after the unit trains from the Midwest are unloaded.

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Honored Advisor

Re: Floor Talk June 14

I agree Ray,

 

We are seeing a different senerio for sure.

 

Wheat feeding in the SW is usually a ----bargain hunting/capture the early sales to make room  affair.  

 

I have never sold into it, before--------the carry into the fall usually is better.  But this year there are some nice basis premiums being paid for wheat off the combine.  That is very odd.

Haven't gotten an answer from the ethanol buyer other than the persistant answering machine.  I was calling to see what basis they were bidding for July delivery of anything.  Local feeder is bidding $1 + basis for corn.

------------

Got the call ethanol bid in the same range but cautiously bought up for July.  He sees this corn spread(old to new) as a problem.

I have to agree.

 

 

 

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Honored Advisor

Re: Floor Talk June 14

At what price or point will you/Cargill go on holiday? Or sell back?

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Honored Advisor

Re: Floor Talk June 14

The problem with the sell back ray/hobby is the inventory is going to be way out of position----------It looks to me.  What do you think?

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Veteran Advisor

Re: Floor Talk June 14

Hobby......we are primarily a food ingredient manufacturer....less than 15% of our corn in Eddyville is used to make ethanol...

 

we make HFCS, citric acid, itaconic acid and provide dextrose for across the fence customers that make amino acids, cyclodextrins, and MSG

 

of the various end use segments, we would be the very last of the last to stop consuming corn...

 

in August 1996, we set a record for the amount of corn used in a one month period (at the time)

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Honored Advisor

Re: Floor Talk June 14

I wouldn't be so sure that thousands and thousands of farmers have corn left in their bins.....Many that I know have cleaned things out a long time ago......those bin augers rattle pretty loud when they are empty.   Smiley Wink

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Veteran Advisor

Re: Floor Talk June 14

Didn't say that they were all holding tens of thousands of bushels...

 

but our daily spot business is telling us many have corn that is dribbling into the marketing system

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Veteran Advisor

Re: Floor Talk June 14

Old corn is old news.  I am thinking about corn just dribbling into the combine this fall.

 

Rain, and rain every week is the only thing that matters right now.  Markets(new crop) are acting like the kid that just graduated from college and thinks everyone wants to hire him for six figures and a months vacation:  Just wait till harvest, and it will be all cheap and plentiful. 

This weekend can really help if we get a much bigger rain event that what is in the forecast for those acres pollinating now in the east and south and the rest of us that are trying to avoid curled and ugly.

 

As for the economy, truck traffic is very heavy on I80.  Usually a pretty good indicator, and it is an unbiased and free report.

 

In the last few years, many of us have always pulled the good crop out of the hat.  Odds are we do again.  BUT.........

Here would be my odds:   10% chance of 160+   60% chance of 145+   30% chance of less than 145.  That will change if this weekends rain is a bust.

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Honored Advisor

Re: Floor Talk June 14

Ray: thank you for the info and BTW I still have about 7000+ bu of corn left. One of those thousands of farmers that do not have the empty bin syndrom. (at least not yet. ) Some where between $6.5 and $8 will get it.

 

My custom guy says I am one of the few out in NW Ks in his area with a decent looking dry land crop of Milo and beans but it needs a rain badly. I may need to make a mad dash just to confirm it.

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