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Senior Contributor

USDA report guess for corn......

Below is my work on What I am expecting the Wed report to say...... 
I do not see as to how the market can go down as it will not slow demand 
only encourage it...... I feel that our markets need to stay high enough 
that china can not import this year to refill there reserves...... 
Of course if the yield does not go down or they find acres or both 
This would help the bal sheet a lot and reduce the the pressure ...... p-oed 




Corn S & D's 

Beg Stocks 1708 
Production 12440 Yield down 1.3 bu/ac 

Imports 15
Supply total 14163 

Feed & Res 5300 Depending on Dec stocks report..... This could be higher
Food, Seed, Ind 1400 Increased HFCS because of high sugar prices 
Ethanol 4975 Could be 100 mil bu higher? 
Domestic total 11675

Exports 1950 Depending on world demand (China-Argentina) could be a lot higher?

Total use 13625 

Ending Stocks 538 

% of use .039%

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14 Replies
Veteran Advisor

Re: USDA report guess for corn......

Ending stocks of 5anything is a pipe dream.  total feed usage is prol;ly closer to 5 billion and my even in the end be 4.9 

THe export numbers don't hold with where you are at.  USDA would have to be blind to forcast that much.  I say ending stocks of 1 billion in this go around.  If not Katty bar the door as the livestock will go faster than anytime since Noahs flood! 

For your sake I hope your right.  BUt I think that the reason butter has been up for so many days this last week is because USDA has been buying it to use for lube for you cash croppers! I think you guys get bent over real bad here. 

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Senior Contributor

Re: USDA report guess for corn......

jr...... I am not happy that the cost of feed is making the livestock people a lot of pain....... I have no control of that....... I am just looking at what I see....... Time will tell about all of these things........I have been saying for a long time that there was going to be a sharp correction in both the livestock sector and the ethanol sector....... Unfortunately there will most likely someday be a big washout and it will effect corn and soybean usage....... You guys can not make it for sure with the price of milk where it is today and the cost of feed so high...... I understand that....... I do not want to have these markets killed...... But I have as I said no control over this ....... I look for 25 to 30 dollar milk...... $1.50 cattle....... $1.20 hogs...... All of this because of the liquidation that you talk of...... These times are a changen and we need to recognize it for what it is....... p-oed

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Frequent Contributor

Re: USDA report guess for corn......

they wont decrease yield 1.3 either they had it zeroed in during the last report.

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Highlighted
Contributor

Re: USDA report guess for corn......

   I think yield could change, but I believe corn and beans both a 1/2 bushel increase, not a big change but I do not expect it to be static, either.   Of course i am leaning to the bearish side, so I could be talking my position also.

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Veteran Advisor

Re: USDA report guess for corn......

P I am not complaining I Juust think your numbers are to bullish.  The livestock sector actually will have apretty good year this year. I think we are close on our S/D ratio in all sectors and that will make us more profitable if there are wild swings ahead.  You have agood day today I have along day ahead as several things broke over the weekend so today is run around and get parts and tomorrow is fix it back up day!

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Veteran Contributor

Re: USDA report guess for corn......

I am thinking any reaction to this report is small, current weather factors are a much bigger driving force.  These reports have lost considerable credibility in the last year.  I would like to see a good pull back here.  Let Jr and others in the  livestock sector buy at better prices.  Keep demand rolling.  That would lead to much higher prices down the road(that is what the Jan 10 report did).  There should be one big move yet this year, which takes out 2008 tops.

 

Even though I am bullish, still believe in keeping a very low debt and a cash flow statement that can handle corn with a 3 in front of it.

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Veteran Advisor

Re: USDA report guess for corn......

jec here's an article that ties into what you are saying.

History suggests corn price could hit $11 a bushel

Are corn prices on their way to $11 a bushel?

It looks that way, comparing Chicago futures prices this time round with those 15 years ago when stocks last got this tight.

The similarity in the move in corn prices is startling, says Travis Carter, a consultant at US broker FCStone.

"The big moves have happened to the day when comparing the two years," he said - right down to yesterday's weakness in prices.

History repeats itself

Indeed, overlaying the corn price graphs for the performance of March 1996 and March 2011, adjusted such that around $3 a bushel then equates to a little over $4.50 a bushel today, shows identical twins from mid-August onwards.

Both charts match on September, October and December rallies, with some weakness in November.

Assuming the trend continues, the chart implies this year's March lot hitting $7.50 a bushel before it expires, to keep pace with the little over $4 a bushel that Chicago's March 1996 contract achieved.

And even these figures are small beer compared with the peak that comparison of July lots implies.

In 1996, this contract topped $5.50 a bushel shortly before it expired, equivalent to nearly $11 when transposed to the graph for the July 2011 lot.

Tight supplies

Some parallels between the two years are not surprising, given their similar dynamics, with the US stocks-to-use ratio for 1995-96 at 5.0%, lower even than the 6% or so expected this season, the thinnest since for corn supplies, Mr Carter said.

The stocks-to-use ratio is a key indicator of a crop's availability, and therefore the prices it can command.

"Just like this year, people all summer expected a big crop which just wasn't there when it came to harvest," Mr Carter told Agrimoney.com.

Reasons for caution

However, he urged caution over extrapolating the comparison too far, for two reasons.

The first is that 1996 prices were also helped by a hefty January cut of 18% in the US Department of Agriculture's estimate for American inventories at the end of the crop year, as well as by a bullish report in March on farmers' planting intentions.

And even if similar revisions this year are not out of the question, it is to be hoped that a second thrust to 1996 prices – the so-called hedge-to-arrive debacle – is.

This scandal - which brought many farm enterprises to their knees, and is still splitting some farm communities to this day, Market 1 analyst Mike Mawdsley told Agrimoney.com – sought to exploit a rare backwardation in corn futures, when near-term lots are worth more than those further ahead.

However, market moves meant the co-operatives and growers who had piled into near-term lots in the hope of making a profit from rolling into later contracts were left high and dry.

"I know of a church where those that were invested in this still sit on the other side of the aisle to those that did not," Mr Mawdsley said.

"We sure do not want anything like hedge-to-arrive back again."

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Senior Contributor

Re: USDA report guess for corn......

In my feeble mind, it is pointless to compare charts from 1996 to present charts because nothing really fits.  The reason corn shot up in 1996 was because of a horrible 1995 corn crop.  Also, it was a one time shot as the Dec. 1996 contract traded well below the summer contracts.  Basically, we replinished our short supply in one short year.  Today, things have been going on for years not just one year.  If you really want to compare charts, I urge you to overlay a monthly continuation chart from 1979-1985 and the 2005-present.  If this doesn't scare you half to death, I urge you to get a monthly chart of the U.S. dollar index and compare it from that time period to present.  Then if you still have the stomach for it, start comparing the unemployment numbers and such from the same time periods.  The similarities and chart formations are very similar.  Using this data, the slopes show we have a chance of seeing some month trade at close to $7.00 this year.  I'd venture to guess this will either occur from the report Wednesday, or from a weather rally this summer.  By next year, the party will ultimately be over. 

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Veteran Contributor

Re: p-oed Farmer, Nice work. Corn the new age

usa pork bellies so to speak, thus expect a mildly bullish report.

 

Keep in mind we are rallying in...so the trend IS up ( matters notta what the report reports actually ).

 

Say ending stocks in the 625 to 650 range.

 

Mildly bullish report and we'll likely sell it off some. MO

 

Say we correct cash down 55 cents to 85 in the next 30 days anyway...then it's likely off to the races again for corn.

 

I figure it's WHEAT that actually leading the way, then Soy, corn comes along for some of the ride.

 

Cash wheat say $11 to $12  by June....makes $7 cash corn then look cheap to some folks, and a great price for others.

 

Cash Soy...say alot of $17  to $22 this year, just like the battery bunny.

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