Market continues to be lagging indicator .....

[Palouser]

.... and even I was getting concerned I'd misjudged how much it lagged since I predicted a move in the market w/in 10 days based on yield concerns and China. From here the question is a continued move upward over a period of, say, a week? Or choppy action due to volatility but, ratcheting upward as long as the weather pattern holds?

Meanwhile, predictions that China will import 50% more corn this next year. A demand curve like that is serious business in a few years.

I'm quite certain we get to do all this again next year to. I can't concieve of events that would prevent the continuing question of 'can we ramp up to build a cushion'? My basic assumption will be ethanol demand and production won't be seriously threatened even if policies are restructured or incrementally changed over time. It's like the quote from a tea party conservative Repub yesterday that subsidies for rural air service are "a good return on investment" and shouldn't be eliminated. Hmmmm ....... the more things change the more they remain the same. The rest is all advertisement.

And wheat is feed.

[patriot3031376]

But what else really matters? The market writes the checks.

On the China subject. They (at least the private Chinese traders) have been telling us this for over a year. We just didn't listen very well. Thats why I am not overly concerned with the whole ethanol story. It is a transitional fuel until we find something better. In the near term there is NO substitute for corn ethanol. By the time one emerges the Chinese demand (and then Indian) will outstrip our yield trends. The corn industry looks golden for years.

[Palouser]

I might be wrong but I'll call for a 3 day 'hits the fan' in the market. Fasten seat belts. I wouldn't say I'm relying entirely on intuition because as possible yield numbers take hold  the end result is really inescapable. Maybe it will be overdone, but in the critical filling stage perhaps reality will be rougher on corn than anyone imagines. It's all going to be a matter of degree, but the evidence of potential being destroyed seems written on the wall. And there isn't much room for comfort on stocks.

Maybe we get dinged on the national scale, maybe it is a real owie when all is said and done. But I think the potential for continued deterioration will tip those most exposed to seek cover.

[justinbarnes710]

It certainly seems as if corn will have a solid floor under it for another year.  The question remains... how high will she go?

At what level will the end-user quit buying corn?  Some at $8... some more at $8.50.

As a producer it is difficult to wrestle with bullish fundamentals and the thought that this just won't last forever.

[Palouser]

If the rest of the season's weather is moderate then I think prices would moderate too. At least until reliable numbers come in.

[animalfeeder]

End users are are already backing away or not using all together. I.E. townsend broiler farm, gone. Wheat replacing corn at a all time high. Even here in Michigan wheat is replacing up to 50-60% of feed rations. Broiler industry cutting egg set 6-7%. Turkey industry cuting egg sets 3-4%. Egg layers are getting rid of under producing flocks faster than usual. Feed lots getting rid of cows early and not refilling.

Another thing that is not being reconized yet but will soon is the number of livestock/poultry that has been lost in the heat the last few weeks. The numbers are outragious.

There is alot of demand destruction happining already wheather it is reconized or not.

[Artifice]

Mr.Paloser-Chinais largely self sufficient in corn,  imports make headlines but net are tiny. USDA reports this in the WASDE in case you are not familiar.  AG ECON 001, high prices kill demand  and incites production around the world. $ 7 let alone 8 is VERY HIGH.. 1 up day is meaningless in a bear market. CBT Sept SRW is 3$ off its Jan high and weak.US SRW supply is plentiful.

[justinbarnes710]

Artifice-

I'm not sure if you are holding a grudge about something, but that was an odd way of making your point.  I don't think we need to belittle somebody for having a different opinion.

Every time Palouser posts a comment I will read it through at least twice.  I've found him to be very insightful and I have learned a lot from him.  He seems to usually have a good grasp of the markets.

By the way... it is possible for prices to climb higher, even after some demand has been rationed.  The next year should be very interesting.