Progress reports Jul 16

[Steve197844]

What was everyone looking for on these USDA progress reports?

[c-x-1]

pretty much what was published, Steve.

unprecedented, for this generation, @ least.

[Steve197844]

Thanks....now if you can tell me how corn will react  to this at the open that would be great , lol 🙂

[CitiFarmer]

I read somewhere that the trade average estimate was for a 5% drop in G to EX on corn not the 9% drop shown. The 8% increase in P to VP will also garner attention along with the updated 6-10 and 8-14 day forecasts of hotter and drier weather in most of the key corn growing areas. I have no real idea how low the 2012 U.S. corn crop can fall, but it may be lower than most of us can imagine.

[Hobbyfarmer]

At noon the report I listened to had the broker saying the traders are still in the 140 nat'l ave camp. I believe that is too high, I wonder what 120ish or less is going to do?

[c-x-1]

i'm not ruling out 7b final on low end.

Steve, read CitiFarmer here and you get the idea. if yer new tradin', just be careful!!

[roarintiger1]

If the traders are still in the 140ish camp, this thing has lots of legs left.   

[Steve197844]

Thanks, not new to trading, just new to trading corn on weather like this hahah

[CitiFarmer]

I agree that few, if any, have experience in this situation. As most are comparing this to 1988, I looked at the situation then and found someone who said Corn G to EX that year was at just 18% vs. the current figure of 31% in 2012.  The 1988 yield was 70% of 1987 so if you take 75% of last year's 147.2 yield or 110.4 bushel per acre times a 86% harvested level (equal to 1988) times 96.4 million planted acres you arrive at a 2012 production figure of just 9.150 billion bushel.  Add in 900 million of ending 9-1-2012 stocks and say 100 million of imports (allows for some Brazilian imports), you arrive at 2012/2013 supply of 10.150 billion bushel.  This is 2.570 billion bushel below the July 11th USDA demand of 12.720 billion bushel.  Add in a minimal ending stocks figure of 630 million bushel and you arrive at demand reductions needed of 3.200 billion bushel during 2012/2013.  Wheat feed use might cover 200-300 million bushel of this shortage still leaving 2.900 to 3.000 billion of demand reductions needed.

It is my hope that we don't see too much long-term demand destruction if this production level actually occurs. My greatest concern is a corn export embargo and I am not saying this is currently under consideration.

If I knew for sure, I would not be working for a living.

[roarintiger1]

Don't forget that we had a huge carryover figure in corn in 1988.....something like 3 billion bushels I believe.   There is NO cushion like that this year. I even doubt that the USDA's ending stocks number is close to being accurate   Folks expecting this market to have a long tail may be greatly disappointed.