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03-29-2013 11:47 PM - edited 03-29-2013 11:51 PM
If USDA decided not to post bushels and just said "the trade estimates for corn are within 8% of our estimates", etc for all other commodities. Would all the negativity still be posted?
Thats what it is (unless my math is wrong), USDA is dealing with thousands of farms, thousands of farmers with some who refuse to provide any data, and billions of bushels. They are less than 8% from other estimates and all of a sudden there is a conspiracy, really?
I don't understand why the market dive to limit down on this data either!
03-29-2013 11:59 PM
trade always reacts to extreme outlyers----upper end of stocks est. was 5.248, so "outside range" is a more rare occurance..........but, IMO---means nothing else, just a day in the life.
03-30-2013 12:19 AM - edited 03-30-2013 12:26 AM
Here's the problem:
The USDA makes predictions based off what "generally" happens; much like how a psychic makes predictions on what "generally" hapens, though we know psychics are not real, and rely on the norms of society to make their guesses; much like how the USDA relies on what it also considers normal for common field crops, and makes generalizations thereafter.
The USDA makes predictions that are probably true, or almost probably true. However, the market believes their statements as if they are, and not as if they are probably or almost probably true, as they truly are. Then, we get people all pissed off on this forum, because the USDA has no idea what will happen for certain; nor does anyone else.
If everyone knew what would make financial sense, they would be out there always doing it, with no discussion. I mean, do you think that the Sharks and Dragons on Shark Tank, and Dragon's Den know what will happen when they invest in a business? No!! And they wholly admit that; its a guess for them, even when they are on top of the financial world. Its always an uncertainty, as much as the current crop year is.
My point is, that you can't take a statement that can't guarantee the its validity/soundness as a wholly true statement. Try to use USDA logic in a criminal court context or a philosophical dicussion at a University, or any other serious academic/professional dicsussion and you will look like a moron. W/ trader logic, you don't have to know what the truth is; you only need to know what people's biggest, darkest, deepest fears are, and to know how to exploit them.
All this crap will start to fall apart as time progresses.. I mean.. cmon.. like we didn't see problems coming in the summer? Corn, just all of a sudden, goes sharply up in value in a week or so? No. Like what, we had 10 days of denial that the USDA could be wrong before our limit trades? It takes Ken Ferry releasing a pollination video to make you believe things are going south? No.
Do you really think that Nevada, Arizona, North Dakota, and a bunch of other marginal areas are going to produce big crops? I mean, like cmon, ND is like 110/120 avg. Arizona/Nevada are deserts in D4 drought... like fcuk off man.
03-30-2013 02:56 PM
I am very aware that this is not possible,but is always a little fun to imagine what would be the responce if all growers as a rule would call there bluff.You know,it theres been enough to come out with a # that promotes a limit down,maybe next year instead of 90 something million acres of corn,89.Rest of the acreage goe;s to forage!
03-30-2013 03:20 PM
Like the economists, it would be the 1 guy that doesn't follow the herd that would turn out to be the only 1 with the right answer in the end.
I'm definitely in the minority, and you probably have to farm less than average to be this flexible, yet I try to maintain as much flexibility as possible until a commitment is required. Seed can be returned and rebooked. P&K isn't going anywhere. Haven't put on NH3 due to March weather conditions. Still pretty flexible for another week or so. That doesn't work for most people though, you're right.
03-30-2013 03:51 PM - edited 03-30-2013 03:53 PM
All it really would take is a 10% shift in acres -- some guys shift more than that from original plans based simply on the weather. Last year's dry/warm March saw increases in corn acres in this area simply because they could do it -- started planting early and kept going. The reverse could happen simply because it's been cold/snow for much of March, and top of ground is wet/cold -- much of a delay in planting and some acres could switch crops.
The primary factor in net profit is YIELD. Price is secondary.