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Senior Advisor
Posts: 3,228
Registered: ‎04-30-2010
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Re: Weekly Outlook From Darrel Good

"Crop insurance favors corn from a gross revenue most years lately. "

 

Bingo.  That is why the corn acres will stay high even if the agronomics doesn't support it.

Veteran Advisor
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Registered: ‎06-26-2012
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Re: Weekly Outlook From Darrel Good

Jim, do you know if crop insurance will cover corn as much as previous years in the more western areas where it's driest?

 

.....and when do they let farmers know what they're coverage will be for 2013 crop?

 

thanks,

 

c-x-1

Senior Advisor
Posts: 3,228
Registered: ‎04-30-2010
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Re: Weekly Outlook From Darrel Good

I don't know the crop insurance situation for the western states, but in the corn belt proper I've heard premiums are expected to decline slightly in many cases.

 

We'll know by the end of February what the spring rpice will be and at the end of October for the harvest prices.

 

I think Farmdoc.com is the best site for crop insurance discussions.

 

http://www.farmdoc.illinois.edu/cropins/index.asp

Senior Advisor
Posts: 3,228
Registered: ‎04-30-2010
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Re: Weekly Outlook From Darrel Good

Posted on the 28th of Jan:

 

"While old crop corn prices are above the level of January 10, new crop futures are trading at about the same level and harvest cash bids reflect a much weaker basis. Those prices are being supported by ongoing concerns about the drought conditions in the western Corn Belt and Plains states. Those conditions are of concern, but have little influence on yield potential and little correlation to next summer's weather (see references here and here). If corn yields are low again in 2013, it will be due to poor summer weather, not to current moisture conditions. As a result, new crop corn prices likely reflect too much yield risk

Issued by Darrel Good
Department of Agricultural and Consumer Economics
 University of Illinois"

 

http://farmdocdaily.illinois.edu/2013/01/update-on-corn-consumption-1.html

 

Here is a December 2012 paper on the correlation of moisture from one year to the next.  This help us understand where Good is coming from on his price predictions.

 

"Conclusions

Careful analysis of the historical record indicates that recent precipitation levels and current soil moisture conditions provide little guidance in forming expectations for precipitation levels next summer. Historically, odds of favorable or unfavorable growing conditions have been independent of precipitation levels in the last half of the previous year."

 

"It is important to emphasize that we are not attempting to forecast 2013 summer precipitation levels in corn and soybean producing areas of the U.S. Expectations about weather conditions in the summer of 2013 may be influenced by factors other than recent and current weather. These factors would include, for example, expectations about El Niño/La Niña-Southern Oscillation events and general climate patterns. The point is that making a connection between current moisture deficits and next summer's weather must be based on these "other" factors. There is simply no general tendency for current conditions to reliably predict what will happen that far into the future.

As a final point, we note that prior to the growing season new crop corn and soybean prices should reflect some risk of sub-par average yields in 2013. That "risk premium", however, should probably not be much larger than in any other year based solely on current moisture conditions. Current forward prices for the 2013 crops of corn and soybeans are well above the levels that existed before the drought of 2012 and likely reflect substantially more than average yield risk.

Issued by Scott Irwin and Darrel Good
Department of Agricultural and Consumer Economics
 University of Illinois"

 

It is important to emphasize that we are not attempting to forecast 2013 summer precipitation levels in corn and soybean producing areas of the U.S. Expectations about weather conditions in the summer of 2013 may be influenced by factors other than recent and current weather. These factors would include, for example, expectations about El Niño/La Niña-Southern Oscillation events and general climate patterns. The point is that making a connection between current moisture deficits and next summer's weather must be based on these "other" factors. There is simply no general tendency for current conditions to reliably predict what will happen that far into the future.

As a final point, we note that prior to the growing season new crop corn and soybean prices should reflect some risk of sub-par average yields in 2013. That "risk premium", however, should probably not be much larger than in any other year based solely on current moisture conditions. Current forward prices for the 2013 crops of corn and soybeans are well above the levels that existed before the drought of 2012 and likely reflect substantially more than average yield risk.

Issued by Scott Irwin and Darrel Good
Department of Agricultural and Consumer Economics
University of Illinois

Advisor
Posts: 749
Registered: ‎11-09-2010
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Re: Weekly Outlook From Darrel Good

Hell he covered all the bases . . . my ass.  What about La Nada?  Please send me some of what this out of touch professor is smoking?  The DSM river is dry, the Missouri river is dry, the Platte River is dry,  he Repulican river is dry, and the Mississippi River is dry.  WTF is this guy missing?  He resides in fantasy land as all academics do.  Pass the popcorn and get me another Corona.   Oh yes . . . we got 1/4th inch of rain last night, record crops are in sight.  What a friggin joke,   John

Veteran Advisor
Posts: 6,101
Registered: ‎05-13-2010
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Re: Weekly Outlook From Darrel Good

Plus he never even mentions the effects of the ten million marginal acres on trend line yields, or the adverse yield effects of corn on corn  production, which we need to get the acres as high as they think are  possible.

 

Reminds me of the professor in the Back to School movie that Rodney Dangerfield has to set straight.

 

Yup, and we want more government employees, right?

 

 

 

 

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Honored Advisor
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Registered: ‎07-18-2011
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Re: Weekly Outlook From Darrel Good

Will be the only jobs available.