From the floor September 12

[marketeye]

jrjfarms,

That drought situation is a real concern. On Friday, I read that the dry pattern could be extended. It's horrible news for those folks. Elwynn Taylor, ISU, has said before that U.S. Southeast drought patterns move into the Midwest. Whether a South and Southwest pattern moves into the Corn Belt is something to watch.

It looks like the USDA is on the same page with others that this year's corn crop is getting smaller. And what do you think they will do, with yield, in the October Report?

Mike

[marketeye]

As I've mentioned before, a floor trader pointed out to me that China stops buying as corn works closer to $8, but starts to buy when the market falls towards $6.00.

Technically, the charts are showing that corn could sell off around the $7.34 level. But, if $7.34 is held then $7.50 is reachable.

Mike

[jec22]

The state by state numbers seem kinda of off.   

No worries.  Flipping channels this morning made the mistake of stopping on FOX NEWS adgenda.  Brian, I don't eat meat, was interviewing some wacko who wrote a book on the evils of ethanol.  Made it sound like if we hadn't used corn for ethanol there would be no problems in the country or the world.  World hunger would be solved.  The cost of gasoline would go down.  Farmers are pocketing direct payments and the 45 cent blenders credit.  40% of all corn goes to ethanol(none of that is used for feed I guess). The government would have a half a trillion less debt.  No mention of oil companies tax credits, etc...

Somehow I was waiting for the fair and balanced part...but it never came. 

Now I don't care if you hate ethanol, but we are never going to begin to solve the problems ahead if we use hype instead of a attempt at facts.  

[marketeye]

highyields,

By dropping corn use by 400 million bushels , do you see this as USDA's way to create their own rationing system?

Mike

[roarintiger1]

By dropping useage 400 million bushels the price of corn will either drop or certainly not go up. Thus it will stimulate buying and ultimately, useage.  They are going about this rationing thing backwords.

[DKIL]

Is USDA predicting that usage will drop 400 mil bu or are they just saying it will(needs to) be that much lower ? Is there  a difference in reporting, predicting and /or dictating?

[Mizzou_Tiger]

is hinting at..........

[Palouser]

You reducing your herd?

[marketeye]

DKIL,

I put your question to a trader, to be sure.

One trader says, "They (USDA) lowered production 417 million then took 200 million out of feed… 100 million out of ethanol and 100 million out of exports, that all seems plausible given low animal numbers…low exports so far..and ethanol subsidy disappearing.. also acknowledging that the ethanol market is on pace to meet current mandates with some extra carrying ..Rin values reflect this… so I don’t think the USDA is out of left field on any of this…they are also acknowledging the lower demand is reflective of a rationing market as they raised their on farm prices… We think they are behind in their bean demand and can certainly lower there numbers on exports and perhaps even crush… but there they raised on farm price.. I doubt they can sustain price and demand here.. but perhaps they are being cautious until they see Brazil plants and start to their crops."

Mike

[marketeye]

With corn as much as 10¢ higher today, even an bearish report can't keep this market down. What does this tell us? Rationing still isn't happening at $7.45? What price will spark rationing?

Mike