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Senior Advisor

Latest fake math from FarmDoc

Here is a link to today's publication from FarmDoc.

First, the first 5 pages are fantastic. They are all statistics based upon the past, and from my spot checks, they made absolutely no errors in the analysis and the presentation. Good work. Take a look...

 

https://farmdocdaily.illinois.edu/2019/05/the-implications-of-late-planting-for-the-2019-20-corn-bal...

 

This is what I posted on our site about it this morning. Agree or disagree, at least it might start a lively discussion. :-)

 

NOW, when we get to the presented S&D spreadsheet the wheels come off of their presentation. They just ignore all their data in the first 5 pages and decide that this year will be better than the data suggests. Why? Because they are weak and afraid.

 

If you look at Figure 5, you have the data and the statistics. If you extend that curve out from 1995 onward, it would intersect at an “expected” yield loss of 22 bu. per acre. I’m serious, that is just the math of it. So, how in the world UofI can use a mere 7 bu number is obscene. So, just based on the statistics, their supply number is over-stated by 15 bu/acre or 1.2 BILLION bushels.

 

Next, they have already reduced demand by a “out of the ether” 400 mil bu. They did it just because that is what they do. Any reason for feed use to be down? no…. Any reason for exports to be down? Nope…actually in short crop years exports actually increase due to fear of supply. Anyone that buys our corn has to have it, otherwise they would not buy it in the first place. Again, just the facts of the case.

 

So, in Table 1: the U of I Scenario with only 5 mil less corn acres is off by 1.6 BILLION bushels. Yep, as I have been saying for 2 weeks, the carryout is zero. 

 

btw....this assumes a very normal growing season after this going forward, the yield forecast would still be 155. For those of us who live in the eastern states, we are smart enough, and old enough, to look at the weather in NC/SC/GA and know what normally comes next for us. We have had massive rains since last August, every month. If you think it is going to keep raining all summer in the eastern belt you must have a zip code in LA LA LAND....    :-)

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6 Replies
Veteran Contributor

Re: Westcott & Jenison model

Using the  Westcott and Jenison weather-related yield model published in 2013 (?) and the planting progress data from May 13, predicted a yield decrease of 16 bpa.  The nice thing about their model is that they correct for later weather.  The -16 bpa assumes average weather thru out the remaining growing season.  If you use their scenario no. 2 that gets you to a total supply of just 14 billion.

  If you assume their consumption of 13.7 billion, then carryout is a mere 300 million bushel and that is $8 per bushel territory.

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Frequent Contributor

Re: Latest fake math from FarmDoc

They talk about getting the price of corn up to an area that will bring acres considered for PP back into production but that hasn’t happened yet.  When corn is planted in June then you have added costs associated with that such as getting weedy fields in condition to plant and drying charges at harvest.  If that late corn gets an early frost on it then it just doesn’t want to dry naturally.  Early, I’m talking late September or even early October.  I’ve harvested corn in December running 19% and that’s not fun to dry as the air is too cold.  Nobody in their right mind ever wants to plant corn in June it may work fine and it could be a joke.  You’re really rolling the dice.

Honored Advisor

Re: Latest fake math from FarmDoc

They have about two weeks yet to dangle that planting carrot with higher prices.  After that, they will have to start to ration the demand with higher prices.  Either way, higher prices are coming.   We just don't know how soon......or how high.  Smiley Wink

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Highlighted
Senior Contributor

Re: Latest fake math from FarmDoc

i think its quite odd how the trade thinks.On  thursday markets were down because the rains werent as torrential as the forecast said! What!?  Its still rain for crying out loud but a meesly 2inches must be a lot better than 4 or 5. Saturated ground is saturated period!  Not sure how the land is in the corn and bean belt but if we get 2" up here it takes time for the land to grey off to seed so there are no ruts or plugged discs to deal with. Mudding a crop in is a total disaster where i farm. what say you?

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Frequent Contributor

Re: Latest fake math from FarmDoc

And "the trade" still hasn't given us a legitimate incentive to plant corn past PP cutoff dates, even if they think that's what they are doing they don't understand the math.   I'm in a relatively strong basis area, lots of processors feed millers and export channels competing.  Certainly WAAY better than what is typical in for instance parts of South Dakota that haven't planted.  And cash bids for November delivery here, after deducting an estimate of what it costs to get there on a truck, net about $3.75 cash to my pocket.  If we're going to be fair at all about the risks of planting June 10 corn we really need to chop another 25 cents to account for higher moisture, potential dockage for test weight or other quality issues, etc.  I don't care if you have a paid for million dollar dryer setup, even then you're going to have to handle and haul it two times to get dry corn delivered to somebody that wants to send a check to your mailbox.  

 

True net is therefore more likely $3.50. a far cry from the $4.00 bird in hand spring RMA price.  And for that $4.00 I don't have to risk getting my sprayer stuck, or the misery of unplugging planter gauge wheels at midnight, or the possibility of harvesting in the snow, or or a hundred other things that go wrong and break and cost more in a season of mud.  

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Senior Advisor

Re: Latest fake math from FarmDoc

Well said Clay, we calc that it takes 5.20 to keep planting after 6/5.

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