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Contributor

Re: What if the highs are in?

What could change? The eastern belt could have a crop for once. I seriously think the area of sub production was larger than people realize.  Northern Iowa is not the only place in the US corn is raised. Other than that the fundumentals are still their.

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Highlighted
Senior Advisor

Re: What if the highs are in?

Just thank God we have Woden to keep america and the world fed!

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Senior Contributor

Re: What if the highs are in?

I'm hearing more reports of users asking farmers with grain contracted for December to deliver in November. This is a sign that demand will not slacken in the near future. Wheat off the West Coast has a huge margin between producer price and FOB, another sign of strong demand.

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Senior Contributor

Re: What if the highs are in?

I don't see any way that wheat competes with corn unless it is marginal corn ground - usually meaning the Plains where moisture is generally limited. Wheat is compatible with DC beans but I don't think even that option competes directly with corn if the following DC beans are problemmatical most years. There could be some situations up north where high pro wheat can be grown and it's not dependable corn ground.

 

I think wheat may be taken out in favor of corn next spring in some areas, especially if the wheat is not well established.

 

 

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Senior Contributor

Re: What if the highs are in?

From my sources in wheat, the major place where acres could roll from wheat is the eastern belt in Ohio and Indiana area.  There was talk about increasing wheat acres and dc'ing to beans later.  That may change if corn rebounds and weather outlook is favorable.

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Senior Contributor

Re: What if the highs are in?

Every location is different.  Locally, elevators have wheat piled on the ground under tarps.  It is supposed to be moved by December, but the local grain managers are saying it won't be.  In fact, they are telling those who had wheat contracted for Dec. delivery into the elevator that they'll pay them storage for the wheat if they'll keep in on farm for a month or two longer.  There were several irrigated pivots around here planted to wheat after the high moisture corn was taken off.  I have no idea what the trigger point for corn will be to get them to destroy this wheat come spring.  Current cash price for corn for delivery next October is around $4.25.  I'm fairly certain this is not high enough to get those wheat acres switched back to corn.  While I have no doubt we'll rebound in price somewhere in here, I have a feeling this next rally will be hard fought because of all the long faces I see at the coffee shop.  I don't think there was a lot sold on the first rally.   

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Veteran Advisor

Re: What if the highs are in?

Boy that was easy.  Not really, I didn't play it that well and that was even with sorta understanding the script.

 

The everything market peaked Nov 5-12 as Bernake scared the markets up with QE talk before the election.

 

Now you got a problem in reigniting it I think as political gridlock and budget mania reigns. I'm guessing the cyclical CRB top is in and grains need their own additional fundamental story to make new highs.

 

fwiw, h

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Veteran Contributor

Re: What if the highs are in?

 

QAEII in’t scary. Bernanke is a student of the depression and knows he needs to do anything to avoid depression. 600B in buys take bonds out of Banks and gives them cash, he is trying to be encouraging to credit creation. There is no secret. If you notice “Printing $$$$” types going back to1913 and the creation of the FED fail to see economic advancement. Money growth finances production. 1980-2000, did the economy grow? Did money growth zoom commodity prices up? No. Why the insistence on being wrong.

 

Grains at this point face snug balance sheets in beans and corn, the market’s job is to ration use. 12 and 550 does that. There will be no headline, by the time it is clear, mkts ill be down 30%+.

 

 

 

And the market has to deal with giant indexer length. These people are set up to lose. Use them to gain premium prices and in the bear sit tight and shoot lower for places to cover short hedges.

 

 

 

Excellent times for the producer and the smart spec.

 

artifice

 

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Contributor

Re: What if the highs are in?

Hi Palouser. I tend to disagree that people will tear up wheat to go to corn. First it is frowned on to tear up an exiting crop to just plant another.  One reason is some may want an advance on payments for inputs next summer,  after all it speeds things up a few months. Some want it for the rotation,  Some want to spread their work load out, Corn will have to go to at least 1000 an acre to even get their attention on this, but as you said they are short bought on crops now. so it could happen but I don't think so.

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Veteran Contributor

Re: What if the highs are in?

Paloser- in the ECB many farms can plant corn over SRW and will. And tehre are the transitional areas where tthe CB becomes the HRW belt. There C can steal from HRW.

Wheat high was made when Russia stopped exports and will bottom when thyey open them up.

That is wheat marketing 101.

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