People can whine and complain about the USDA all they want, but a lot of the stocks data comes via farmer surveys. With as much on farm storage that has been built over the last five years, it's not inconceivable that some/a lot of farmers gave incorrect data for the June Report. More than likely, a lot of last years production was moved from on farm storage to commercial storage in August. Commercials really don't have any reason to give incorrect data as they simply just lock a margin in by shorting the board once grain is sold to them until they sell it to an end user. This would lead me to believe that the information we received today has more merit than what we received the end of June.
We were trading in the $3.40's when the June report came out. The day of that report, we traded up the limit. Even with today's meager nine cent loss, we're still right at a buck and a half higher than what we were trading when we "supposedly" lost 300 million bushels. We're still fifty cents higher than where we were in January. How often can you sell off the combine at the annual highs even though stocks are the fourth largest in a decade? The only thing propping this thing up right now is the final yield. Contrary to popular belief, $5.00 corn is rationing demand. Yet, we don't even know whether or not we need to ration demand. With little to no carry in this market, it's telling me to let it all go right off the combine rather than storing it. I called for basis for March delivery, and it was a measely four cents better than harvest basis. However, I do expect harvest basis to widen as it just did on Monday and we really haven't harvested anything in the area besides high moisture corn. Considering wheat broke through support yesterday, I think everyone should be more than prepared for corn to follow. I still remember in 2008 when USDA projected ending carryout at 717 million bushels on corn which eventually led to a +1.6 billion carryout.
