cancel
Showing results for 
Search instead for 
Did you mean: 
Honored Advisor

They`re importin` corn!

I heard it on `Dub-ya H-O` radio Big Show.  Now conventional wisdom always said "When they offer free price later, you better sell".  I think there`s a couple different things happening "this" time.  They are offering free DP just to lock up the bushels, it doesn`t have to do with tricking farmers to deliver and buy it cheaper in a few months, it`s just about getting the bushels in their silo and worry about price later.  The reason "exports are down" is because we are importing...duh!

 

Anyway, heard Ray J on the Big Show, he sounded great, gave his prediction of 13.5 billion corn, off 97 mil acres and 153 yield.  I think that`s a sensible estimate.  If we really are importing, we basically will have a empty pipeline come fall and a 13.5 billion crop shouldn`t be "burdensome" ..$5 should be a sturdy floor???  Just my 2¢ Smiley Happy

0 Kudos
11 Replies
Veteran Advisor

Re: They`re importin` corn!

Sticking to my guns..I had responded last week to Ray's 153 on 97...........think the stars will have to align most amazingly for that to happen......they might even have to pulsate.

 

153 might be a top end est. if only 75-80 are planted.

 

does the mkt need to hope for that so it doesn't completely panic, yet? SURE.

 

Let me at least see how this is attainable on paper, ey? For simplicity sake, cut the belt in half...drought-west/normal-east. The east would have to average 180 bpa, west almost 130....there's my simple math on how this can be achieved.Smiley Wink 

0 Kudos
Honored Advisor

Re: They`re importin` corn!

I agree, Cx, but as a grain buyer Ray is being very candid, considering Smiley Happy. Those trying to temper the market with "2 billion carry,165 yield, 100 million acres" cough cough.....Gulke buy a put, are running out of runway.
0 Kudos
Veteran Advisor

Re: They`re importin` corn!--Good's Stocks est.

true BA--165 on 100 is even more other-worldly!

 

Mr.Good is estimating 4.935. see full article below.

 

http://farmdocdaily.illinois.edu/2013/03/anticipating-usda-march-1-corn-stocks.html

0 Kudos
Honored Advisor

Re: They`re importin` corn!--Good's Stocks est.

Corn stocks at the smallest level in the last 15 years....... Certainly not new news.

0 Kudos
Veteran Advisor

Re: They`re importin` corn!--Good's Stocks est.

True roarin'...considering etoh production was barely - if even begun then, though....THINK HE WAS REFERRING TO '96 (17yr) when stocks were just over 3... Even if it's not new news, historic, nonetheless......if cattle #'s weren't so low, we'd be %$&%!#$@

 

call me slow, but i just did the math on where we are @ on the balance sheet on exports -- avg over the last 10 yr = 42% (Fri report)

0 Kudos
Veteran Advisor

Re: They`re importin` corn!--Good's Stocks est.

1996 is a bit of an analog year......especially in regard to the fact that farmers are not forward contracting new crop bushels....as I recall basis had to do a lot of work post harvest in 1996 and early 1997 as the farmer was not happy with the flat price and the carries came out with the hedger blowing a lot of inventory in early winter of '97....

 

I suspect we may have some pent-up export biz to cover during our harvest and shortly thereafter as anyone who can postpone buying corn prior to harvest, or who can postpone taking that "one last cargo" for 45-60 days just ahead of harvest will be in the market to get that corn moving to them.....

 

thus, setting new crop futures without basis seems to be a realistic plan.....and maybe add in the fact we are not out of the woods on our '13 crop and could see another rationing job with strong basis if the crop comes in significantly subpar....

0 Kudos
Veteran Advisor

Re: They`re importin` corn!--Good's Stocks est.

rayjenkins,

 

that's interesting to me that farmers didn't fwd contract new much in '96 either, huh? I hear they're only around 8-10% now. does this sound close?

 '96 was my first year in the business and I didn't know jack about jack.

 

RE: topic of next post, could it turn out to be a real crunch for users postponing their last cargo since it appears there will not be a significant amount of new corn available before Sep?---certainly compared to last year when estimates of close to 1 b were for sale in Aug.

 

Also, i ran across a farmdocdaily article I'd saved from Jan 26, '12. Good was saying south central IL Corn basis hadn't been as high (+5) in 37 yrs. As i remember Corn basis has been strong since Oct '11...of course it's still getting stronger.

       Can any old timers remember a time ever before when basis has been positive or "strong" going on 17-18 consecutive months now? 

 

thanks,

c-x-1

 

 

0 Kudos
Veteran Advisor

Re: They`re importin` corn!--Good's Stocks est.

If you are running a 10,000 mile supply chain, you are probably not going to risk running out of corn just to pocket the value of the inverse between August and November......but there may still be opportunities, depending how big of a supply buffer is being used...

 

We have two large steel bottomed tanks that each hold about 1 myn bushels.....but there is 225,000 in each tank that is unflowable....I am pondering if we clean out one of those tanks all the way and live on less storage between late July and the first of October....it couild be worth $450-500k......decisons, decisons

0 Kudos
Senior Contributor

Re: They`re importin` corn!--Good's Stocks est.

    Don't know much about corn price way back,but wheat has never even in07 got close to old time highs. We are getting an education where levels will find resistance with so much third world involvment.(I wonder if the new paint market pays any attention to the third world pricing of ag commodities?)

0 Kudos