From the Floor...From the B-Team

[Jeff_a_Caldwell]

So, I'm not on the Floor like the real Marketeye, but since he's out wandering the countryside this morning, thought I'd take a stab at an update or 2 here. Save all of your negative feedback for Marketeye when he gets back! Ha!

Anyway, pretty clear that we're looking at limit-up in corn at least to start the trade this morning. Beans won't be far behind. A couple of key things in this report: Big-time yield adjustments in states like Iowa and Illinois (that state went from 174 in the Sept. report to 160 today), and the September 1, 2011 corn carryout. I hear a 1 billion figure there is bullish enough, but the 900 million figure today means we'll need a whole lot of corn next year, one source tells me. So, just based on that figure alone, it's all bulls today.

So, how will you adjust to what the market's expected to do here after these numbers this morning?

I'm not Marketeye, but I did stay at a Holiday Inn Express last night! ;>)

[jrsiajdranch]

You also have less hair than Mike! HA HA

ANybody wan to buy some cows?  alls you got to do is feed em! JR

[p-oed Farmer]

Hey jr...... With this where do you see milk prices going ?........ I would suspect up?....... p-oed

[marketeye]

In indiana and Illinois with Brazilian reporters. Farmers are telling us they are one-third sold and will store the rest.


I wonder if that will change after today's report.
Meanwhile, the Brazilians are saying that farmers there have not been selling the past three weeks. But, today's report will change that.

[SouthWestOhio]

I'm a perma bull so take my comments in that context.  It will be interesting to see what export action occurs today on the expected limit up trade.  If nervous buyers start pulling the trigger at these prices we could see several limit up days to get the price where it will actually start rationing this crop.  Only question is will it take $6 or $7 or even $8 to slow down sales so the pipeline doesn't run dry next September.  With the agressive consumption of the record 2009 crop and the 2010 crop coming in 10% below that (I still think we will see 154 bu/ac by the Jan report) we may have trouble meeting world demand.  The pipeline also needs to protect itself from the possibility of a late 2011 crop, ie delayed by weather.

Cotton is already competing for acres in the south.  This adds a new dynamic to the cost of buying acres for 2011.  It is not just a battle between corn, wheat, and beans.  Not sure yet how this will play out but anticipate some lofty prices as the market tries to guarantee acres.  We also need a good yield from SA this winter.  If they underproduce that could cause real long term problems by decreasing demand as the world adjusts to tighter supplies.  I'll be praying for rain south of the equator.

[redrotor]

I doubt dairy prices will respond until milk supply falls short of demand. Today, dairy profits and equity are being threatened and milk processors never cared much about that. In the past, it didn't matter what problem dairyman had, the solution was to produce more milk. With high feed costs, it's not so easy to produce more. Again, I doubt that processors care. 

[jrsiajdranch]

Poed red is right in terms of the big picture.  There really isn't any reason to bid prices higher as we have alot of product available and looks that way for a while.  However before I started tyoing I went over and looked at the days class 3 trade and it was up 9 cents?  all of the 11 contracts were up double digits.  I wouldn't get to excited about that.  In the future this is bullish.  Down the road milk will be huge to the upside.  I know of one livestock guy who said he had over 100,000 bu. of corn on hand now and couldn't see any reason to not sell that corn instead of continuing to feed.  thats 500,000 dollars of corn that doesn't need to be fed or cared for all winter the same as cattle and pigs.  He isn't retiremnet age or anything he 's just tired. can't blame him. 

I would suspect that the correction won't really happen in livestock till years end.  Most dairy in the midwest has the forages put up so now they are commited till next spring.  But after that Katty bar the door. JR