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Honored Advisor

Re: Saw corn harvest yesterday

Anybody still reading this old news...... think about it ----- what day did this wind/hail/weather event occur--August tenth maybe...... and Mike has been on it for some time....... as has SF articles and video.... it is still a terrible mess and is not going to harvest itself....  still on the ground on September 4...... Not Going to Stand Up.

Naturally the crop tour counted the FCStone version of everything will stand up again .... and drove on by claiming it to "be minor" ..... the stone man told me "it was in the formula"  (that ten minute formula that came out before the wind went down.  Took minutes of preparation.)  The drive to be first to state and the desire not to overstate overrides details and facts as usual.

Give the producers some slack.  Insurance and usda diseaster funds are driving the wagon now the 2020 corn potential crop in iowa is still growing and negotiating.-- I got a photo sent through twitter yesterday of an ear of corn being plowed under (less than 40 long and 18-20 around with a claim of 39K population) claiming it was 280 bushel corn-----that is called negotiating........... but the Iowa corn crop that is headed for the "market" for end users and export buyers is shrinking every day and the graph of bushels harvested just fell off the table because the real yield on that field is 0.  And is being duplicated into huge numbers that are so far, unrecognized by usda and fcstone and all the fungus that profits from lower priced commodities( in dollars or donations) 

I can distinctly remember days when I have been bullish on ag markets and days of serious bearishness.  Never listen to anyone who was on one side through the last ten years.......  And if you know someone who can't remember feeling either way.....or can't feel anything, be kind and help him out of traffic and politics.

The next two years are going to be difficult for farming in iowa, the state that is #1 in corn production and probably #1 in corn usage.......keeping it at home and using it locally takes infrastructure .  The corn production will come back much faster than the storage facilities lost on August 10, assuming Des Moines doesnt pave another 6 counties in that time.(and naturally blame farmers for their water greed and undeveloped road system.)  Storing corn on the ground in Iowa means a 20% loss of production every year or more.  This will take as long to fix as the nebraska floods ..... which haven't bounced fully back in grain production yet.

Thanks for slow(55) crop tour Hobby and maybe my only lifetime opportunity to see better crops outside Iowa than In overall.

Iowa,  chin up no easy decisions this fall, and keep negotiating.  Drive safe and hug the grand kids.

 

 

 

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Re: Saw corn harvest yesterday

Millions of acres near ZERO?     The satellite maps just don't support your comment. Maybe 5 mil acres damaged, 3 mil of that dinged not killed, so 2 mil acres zero'd out. So, yes, when you add up 40 bu better than average on 10 mil acres easy, that is 400 mil,  2 mil @ 200 now at zero = 400 mil....  so yes I do think it can compensate  :-)

Please, I am not trying to minimize the pain, just trying to tell you that EVERY TIME that I become convinced of a prodution shortfall, usally driven by conditions in the eastern belt where I live (ie iowa for you), it has proven bad for my financial performance is all. So, just for balance, driving a good area in MN, or SD, or IN, or S-IL, or MO, or KY, or TN, to S-OH just can keep you balanced is all. Take out your 2 mil acres and the carryout is still close to 2 Bil, not so for beans, which is why I have been very bullish beans for a long time, but for corn, when you plant too many acres it is very difficult to overcome, even with the worse thunderstorm in recorded history.

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Re: Saw corn harvest yesterday

It might not come out until January 2021 but the Iowa drought is the big story.  To achieve that "above trend yield" Iowa has to be hitting on all cylinders and I think August took the cream off the top even those of us outside the derecho zone.  Just getting the crop pollinated is a long way from just putting in the new Silverado order and going on vaycay until October.  It`ll take until January, but then they start talking "record 2021 crop"  Smiley Happy

But Minnesota, is good and everything, but you have to go above I-90.   And the thing about Minnesota there`s a lot of their soils do almost need "too wet of year" unless they have irrigation.  Since 2012 they have been that secret garden spot and it`s been too wet.  I`d say that Rochester and north is their garden spot.  But you get over to Luverne, Worthington there`s dry spots.  Last year the wettest I`ve ever seen was Martin, Jackson counties just never quit this year they had that extra charge going into the year.

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Re: Saw corn harvest yesterday

I did not say millions of acres near 0,,,,,, even though its a political year I am not running for anything so don't sd me.

I said the disced acres are at 0 production per acre unless you want to gather ears with permission-- real crop not usda fake crop or manipulated yield crop........ for every acre disced production drops and acres drop==usda dishonesty..... in truth production drops and average yield per planted acre drops.   I have no idea how many acres will be disced, but without storage the choice will be tempting.   .................... I do not think the satellite maps are accurate..... still fall into the stand up theory...  I know how wide the thin slice we saw was ...... have no idea how many acres of corn are in that storm path...... usda should know.  We actually saw around 10 tractors discing and in that one drive probably 40-50 fields already disced out of 250-300 damaged larger fields observed, field conditions said they were just getting started it is hard to get crop insurance to make a decision in less than a month.... very round numbers.   No way to tell which one is better or worse.... what is standing in places doesn't have an ear on it, what is down is tangled and dislodged for the most part.  It is a mess -- I was a bit shocked that it was being disced as completely as it is..... special exemptions for this area?... out west we have this occasionally in smaller cases and they force us to at least cut strips or take it to harvest and use the reels.  Its a choice but never an easy one or good financially

Maybe the destruction of bin space is prompting some insurance or diseaster amendments.  I don't know.  Good crops were being disced under but the question is harvestability....... lots of dislodged stalks and ears.  patches of standing corn without ears.

I am thinking accounting and your thinking marketing....  I do not bet on pain.  I market on value and demand.  the iowa wind is a long term issue that may not affect markets as opposed to the cheap crop export sales that should be driving price and will eventually.  Your convinced a 2 billion carry is abundance and I think it is not enough for the volume we use annually.  A covid shutdown in agriculture would reck us just as it does our friends on main street who are in trouble without reserve inventory or sales.

I am pretty balanced..... low to the ground and understand life in the wind.  Iowa is just a rare phenominon to witness and the process of working out of it will be interesting-- I am sure the answer will be more federal debt.  I know its a big country and what it takes to raise 13 B corn and feed half of it to livestock  or the other 5 crops in our area.  You assume I am chearleading the market.  I am much more tied to the consumption side than most and I wanted to go see what changes the way the cattle feeders buy corn.  What makes it into press is not always the extent of information out there.  Contracts for grain changed in august and more local grain is going to end users straight out of the field than normal years.  We normally have to wait until the cheaper, across the scales corn at elevators is "harvested" by the buyers. 

I think it was the drought ahead of the wind that pushed the basis locally which eventually ripples up into the corn belt if need be. Eventually encouraging some direct contracting from producers.  Its subtle because 75% of the corn raised sw is an end user sale.... even if it goes through the ethanol wash.   Short- I think there are a lot of reasons to expect marketing opportunities in the next 9 months.  One of those is how quick some-including the crop tour-- were to down play the damage in Iowa--  maybe we are grasping to hold on to that 2 B carry out.  stone raced to say 200 million--someone else could have easily said 1.5 billion may be affected.. and eventually be right.  That is why the rush to make guesses is so important.  The producers don't have a voice in the market.   I am still waiting for the day that we recognize the weakly sale of cheap grain out of the ports.  That is bigger than the losses in Iowa and the down playing gets quicker every week.

We drove Missouri, Iowa and Ks,  the week before the panhandles to Lubbock........... for that group of areas, Missouri has some nice areas nw.... but the restof the group are below the last two years in number of acres of corn and quality..... ks is better where there is still irrigation and NE..... nw below what it has been...... dry land acres are increasing in western ks   at the expense of irrigated corn that hammers the carry.   Corn north of I-70 will harvest before the panhandle area.  Drying up fast every where on dry land  ---out of gas.(water) ---Milo is beautiful in western ks (dodge city especially ) and will be a very pleasant suprise for producers since it now has a basis higher than corn, and a home to go to.(somewhere out of the US.)

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Re: Saw corn harvest yesterday

Didn't mean to ignore the beans..... Hobby knows the area better than I and we avoided deep analysis on them.  I think they were in worse shape than he did.  They look better on the fringe of the storm.  In the storm they survived standing but the top looks like its been through a blender.  They are shorter than they would normally be but have decent pod numbers  several two's on top like they stopped there.  They have that static elec. gray tint which doesnt always say that much.  We didn't evaluate them too much --- they will all cut .........along with the debris that is scattered in them.

Some starting to turn normally...... many drying out prematurely.both crops......... we were in the drought area west of Des Moines and drove into the better areas to the southeast.

 

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Re: Saw corn harvest yesterday

What we have had here in Iowa is three black swan events.

Started with abnormally dry ...swan 1

Then that breeze...                      swan 2

Then the heat with no rain.       Swan 3

Swan one and three also visited Nebraska.

I live in the fringe area of Iowa and was not in the drought monitor map area till this last week.

Looks to me I have an above aph yield so I'm not talking my situation. We took that little drive about in a less than a week old pu (beat the after harvest rush to get a deduction).(YES it is e85)

I'm not sure the full effects of this three swan event will be acknowledged for at least nine months.

Btw 6 to 8 weeks cushion in grain supply is not a massive supply. When it starts getting close to hand to mouth most of the excess will be out of position or not for sale. Our state will not have any carry out next year when imports  to here are figured in.

Who do you think owns a high % of the carryover every year?

A) Feed companies? 

B) Export grain companies?

C) Grain traders?

D) Farmers that don't want to be in the next tax bracket?

 

 

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Re: Saw corn harvest yesterday

Hedge Fund ownership of corn, beans & wheat went positive first time in 2 yrs.  Grain companies that export had their "harvest" early about a month ago farmers puking and bringing it in for $2.70 in lines of Parker boxes and cabover Petes.   Merrrry Christmas!

I`m not going to say these will always be around, but the old money guys with 3 years worth of corn stored in everything from 50,000 bushel Brocks to 3,000 bu government bins have been around a long time.  You see them loading grain, "Oh, you`re selling it?"  ..."Naw, I rented some bins that I`m moving it to, to make room for harvest"...shaking my head, "Okay, carry on"   Smiley Happy

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Re: Saw corn harvest yesterday

Hedge funds don't own grain . They may call it that but all they own is paper promises. Really quite an elaborate ponzie scheme.

With out it, it would not be so easy for the USDA to manipulate the crop numbers. Like the shell game only it gives them more empty shells to work with.

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Re: Saw corn harvest yesterday

This is a stupid question, but if I contract 10,000 bushel to deliver to the ethanol plant out of my bin in March of 2021, who "owns it?  Me or the ethanol plant?  Or both of us?  Smiley Happy  in USDA`s eyes.  

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Re: Saw corn harvest yesterday

Not a stupid question and if more knew the answer the wool wouldnt be so easy to pull over the eyes.

In accounting terms -- the day the contract is signed control and ownership of the grain passes in exchange for future delivery and an account receivable.  By the grace of God you get to use cash accounting and delay the taxes until the date of delivery or Date on the check.  But just try to sell it again...... it is the purchasers grain from the date of the contract--(many who won't contract before harvest have learned the hard way).  But hobby is making a great point.  Usda misleads the market every time by counting all stored grain as available grain regardless of ownership.  Need a clearer example -- try to buy corn in the okla panhandle in late spring with bunkers of grain all around.  More than a truckload may need a few phone calls.     The same is true of the market.  once it is contracted and hedged whether by the coop or by an enduser storing in your bins, it is not available to the market.  from that exchange it takes a sale and a buy that cancel each other out to change ownership.  It changes hands but cancels itself out --no new grain is manufactured by the multiple trades of the same grain.  To here some analysts relate harvest and carry you would think they manufacture the grain on paper every time it is traded.  Carry is actually grain that is produced and stored but never committed for sale.  Ground piles rarely fit into that category.  Even grain stored in a coop is questionable because the purchaser has it captive to a very limited market.  The consumer is forced to pay the bidding of several middlemen out of the reach of most producers, none of which are producers or endusers(the crowd that produces analysts).  Carry is a very loose term....... as designed.

The ethanol plant owns what used to be your beans ------- and your providing storage.   The part I seriously dislike about farm storage and you have to remember when contracting, a 40 cent bonus for 4 months out is actually a 24 cent bonus if using your storage and less if your guaranteeing condition of the beans which can be an issue.

Hobby thinks corn might be a little tight now since they are open today and monday at ethanol.. I think beans are because we sold farm stored to cargill and they want us to deliver the below 2% foreign matter discount in additional beans.  Subtle signs.