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Mizzou_Tiger
Senior Advisor

Listen........

http://maysreport.com/2012/01/12/interview-with-usda-nass-statistics-director-on-jan-2012-wasde-repo...

 

about 18 minutes...........

 

the acres part is interesting, have to get my chart up and running............those that think 95M is coming might wanna pay attention, especially when you consider cotton and wheat.........

 

my favorite part is around 14 minutes........he gets a question about wheat and why numbers suggest two different things.........he gets pretty antzy and throws up a hail mary answer and not my problem.........then think about that in regards to corn........

 

also, this gives a nice calm way to look at the hard numbers..........you start to realize there is less out there than last year and the carryout numbers are being carried by lowered demand...........then start to factor in the SA production numbers that will get cut in a report or two.........things will get tight again.......

 

EDIT:  I might have to side with you guys that think the USDA is no conspiracy.............I am not sure they are smart enough to pull that off..........makes it pretty easy to keep people guessing when the left arm doesn't know what the right arm is doing........

 

also pay attention to the comments about percentage held on farm versus off for each crop...........

 

EDIT2:  read not less than 3 different stories of additional cuts to SA production.......all estimates under USDA and many way under.........from private and government sources..........for those that say the pictures and stories out of SA are taken out of context and its bunk..........you probably need to do a little research.......governments of Argentina and Brazil both have issued states of emergency and drought aid..........they dont do that based on some pictures out of context..........

 

again dare I say it again.........be very careful playing this report from a bearish angle...........all those end users that were crying just caught another down draft...........

 

O wait, theres green on the overnight screens..........HMMMMM..........o and pay attention to basis,...........and I quote "The U.S. national average basis is 19 below March futures based on DTN's national cash index price. That basis is 26 cents stronger than last year at this time. ".................HMMMMMMMMMMMMMMMMMMMMM less stocks on hand than last year and a tighter basis.............

 

EDIT 3:  and I quote two great twitter feeds............."got to play with the hand you are dealt, even if the dealer is cheating"........."is the USDA on f-ing crack"...........classic...........

 

o and make that a 4th on SA drought and production mark downs...........like I said, the USDA hid its 300M in SA production this go around...........they have to be running out of cards here...........course maybe they have enough crack............Smiley Happy

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11 Replies
junior359
Contributor

Re: Listen........

M.T.

I'm still with you even with everyone else getting on the bear train  Lots still looks bullish to me. 

Why is everyone missing that on corn the stocks/use ratio is still unchanged?

Why do they not think that argentina weather is not so bad? everything I have found say's they got a real problem I mean just the temps alone are horrible I would think even on irragated ground what I been seeing is alot of 105-110 degree temps?

I read article on DTN just the otherday that seed corn production in US last year was 30-35% off expectations, was thinking seed corn is grown on some of our most productive ground here iowa nebraska  illinoise indiana   if they were that far off then why would a number like macintosh's 141 be so inconcievable???

vrbuck says that the rains came down south and saved the day.... so then why did the bean market react the way it did today??  I mean i the rains saved the day for thier burnt-up corn and drove the prices down then wouldn't they have been doublly good for the beans??  usda even added to bean supplies and they still had a decent showing today??? this I really don't understand.  MT  what else am I missing?

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jrsiajdranch
Veteran Advisor

Re: Listen........

again dare I say it again.........be very careful playing this report from a bearish angle...........all those end users that were crying just caught another down draft...........

 

 

Really corn locally is $5.91!  IF that is a down draft I got news for you. Corn isn't even back to where it was just 60 days ago.  But I guess if you wanna tell me this is a gift.....................

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

BTW why isn't $5.91 corn expensive?  OR is not just high enough for you? 

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nwobcw
Advisor

Re: Listen........

   $5.94 corn here.  The recent high was $6.53 on Jan. 3.

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Hobbyfarmer
Honored Advisor

Re: Listen........

$5.91 is expensive  PERIOD. I sold almost a fourth of 2011's harvest at that exact price about Christmas time after it had come back some from it's lows. Sold more the first of this week for $6.37 and at both of those prices was better to be on the selling end of the deal than trying to buy RETAIL and add value from there. 5/6 years ago it was under $2/bu.

 

on a 500 bu wagon load that is $3000+ more $ today than in yesteryear. Now that is inflation.

 

In my opinion if your costs to raise corn are approaching $6/bu...GET A JOB in town. We are only one Black Swan event or great harvest away from corn with a 4 as the first #. 

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Mizzou_Tiger
Senior Advisor

jr.........

just telling you what I see.........dont take it personal...........a lot of folks have fought this thing for a year saying its 2008 all over again........I think we debunked that deal.......

 

I think the volatility is something that is making things even more difficult to navigate for end users............when we have 40 cent daily moves and high priced grain.............versus 40 cent yearly moves and cheap grain........it compounds the situation.......

 

never say never, but $2 corn is probably gone............$3 is still possible, but we are talking intervention.............$4 could show up with S/D fundamentals.............$5 is likely then new $3............$6 the new $4..........and so on.............

 

you wanna argue about whether $5 whatever corn is expensive or not...........I am telling you that is the wrong argument to have, and that end users are going to have to figure out how to operate in that environment for awhile..........FYI, most are despite this idea that demand is dead, $5 corn works now for most.........which means its basing out........thats a fancy way to say we now look at $5 as the spring board up instead of $3............

 

I am simply saying that when old crop got down into the $5's and new crop the $4's................end users should have been buying instead of thinking its going to $4 and $3...............

 

grain farmers can go broke with high grains prices just like livestock/end users can go broke with low grain prices..........

 

http://www.agweb.com/article/high-profile_crash_of_a_titan/

 

have a read.........these were some of the big boys........

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sw363535
Honored Advisor

Re: jr.........

two things I would like to add to MT's,

 

Drivers of this--------supply is stressed, volatility is the indicator as much or more than price.  And if the world demand is increasing it might take a while to have a strong, stable supply again.

 

Drivers of this----------inflation of the dollar,  it is real and government(our political decisions, yes us)   has put us in a position where a devalued dollar is not going to change for a while-----IMO

 

---------------------------------------

 

U gotta see some milk prices in the 25-30 range ---------been reading --------------milk and meat have to be part of the inflation equation.  or we got a wreck coming.

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jrsiajdranch
Veteran Advisor

Re: jr.........

W said "U gotta see some milk prices in the 25-30 range ---------been reading --------------milk and meat have to be part of the inflation equation.  or we got a wreck coming."

 

 

AAHHH yes the belief that inflation will be the salvation.  However the reality is that inflation causes decreased consumption ,or less demand. 

 

Why? Because inflation is a tax on the poorest among us. If you are working at a job that pays 14 dollars an hour you will be making less than 30,000 a year. IT will take 4,500 dollars just to get to work! The average family today needs about 800 dollars a month just for groceries. That takes up to about 9600 a year. After the person has paid for fuel for his vehicle and himself Almost half of his income is gone and he hasn't paid for shelter or anything else. IF the cost of food doubles what is this persons incentive to work? 

 

When you start to look at Livestocks best years they are low inflation years. Grains best years are years of high inflation. 

 

Inflation willnot be the savior of our livestock sector. IT will only prosper in a deflationary spiral.

 

I do not see that coming anytime soon.

 

SO the good times will continue to roll for you grain boys!

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sw363535
Honored Advisor

Re: jr.........

Thanks for the response.  Not sure i agree with your grain vs meat  senerio, if demand for food worldwide is rising why would meat and dairy be left out, wouldn't those prices be expected to respond too when their costs go up? and when consumption drops I would assume supplies of all would rise in response to each other.

 

 

Inflation is not a desired outcome.  It is just a reality.  tractors, trailers,  land, etc.  We have no control over that.  maybe congress does but that is another issue.  We have to live with what is.

I understand what inflation is.  I do not think inflation is good for anyone, but will hurt all not just a few.  It is the function of prices rising.  The reality is milk prices have to rise in conjunction to everything else.  Why has milk not responded as meat has with an upward price.   Sorry to bug u but if u have time i had a couple of related questions.

Are milk stocks high and are prices not going up for fear of decreased consumption, or are there other factors? why are milk prices so inflexable?

Do the mega's dairy's hurt or help------and are there more of them(overproducing) or am i just seeing historic ones moving to the SW from urban sprawl in southern cal.?

No offense but I dont follow the deflationary idea for livestock.  My neighbors selling feeders are having pretty good years, if it weren't for the drought they would be all smiles.  And our local feedlots and hog farms are not cutting back but struggling to find enough placements. 

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sw363535
Honored Advisor

Re: jr.........

sorry for dumb questions jr.

dairy is just an area I have little experience, knowledge, or training in.

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