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hardnox604008
Advisor

a few thoughts

-Looks likely to me that corn yields will fall below trend although hard to say how much at this point. Kinda feels like '95 to me- hot but some rains around so hard for the market to get too bullish- not until later do you realize that more didn't get the rains than did. Of course GLS was part of the backstory in '95- not an issue now I don't think. No prediction as to whether it could out to be a '95 type shocker again.

 

-Distress returning to Europe bank stocks and CDS after the world was saved last week

 

- Regardless of the immediate outcome of the debt ceiling impasse it looks certain that there won't be a long term fix which means almost continuous uncertainty all the way to the election. And probably beyond. A horrible environment to make any sort of a decision- business or marketing.

 

- I continue to say yech. But if some rain and economic turmoil sell corn off some I will probably look to some sort of low cost long option strategy.

 

-The world really, really could have used a lucky break of exceptional weather and a build in grain stocks. That isn't going to happen, probably just a question now of how much drawdown there is.  Given other economic vulnerabilities this is very, very bad news- severe probelms next year could add several straws to the world economic camel's back.

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7 Replies
Palouser
Senior Advisor

Re: a few thoughts

I see Lansworth and ISU are down in the 153 bu range for corn estimates. It will be interesting to see how the market squares this up in the future. I guess one could say that the trend of the trends for yield may be down.

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zman343
Contributor

Re: a few thoughts

Hey Nox,

 

Haven't posted in a long while but have been following along and always enjoy your comments.  I would say corn yields should be adjusted downward by USDA, especially if crop ratings keep dropping below a year ago.  As far as price, you'd think it would be supportive but all this other stuff going on in the macro markets dominates the trend for now.

 

The Europe deal is sort of a joke but everybody thinks it is good.  Doesn't really solve any of the problems but oh well.

 

As far as the U.S. debt, I think they will get something done before the Aug 2nd deadline but doubtful it will be anything longer term.  The fact that the markets didn't tank today, as warned, will just keep both sides solidified in their stances.  We didn't get that failed TARP vote moment where Congress crapped their pants.  The few trillion dollar deficit cuts over 10 years being tossed around is pretty meaningless when you run 1 trillion plus annual deficits.  I think the chances are high that the U.S. will lose its AAA status.  But hey, anymore Default is the new AAA.  Take care.  Z

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animalfeeder
Contributor

Re: a few thoughts

There are something's that are going to effect the carry over, thats is the usda reconizes it.

1. Livestock, poultry are feeding wheat at a rate never seen before.

2. There were some tremendous losses in the livestock/poultry industry last week from the heat.

3. Broiler eggs in incubaters are down month after month. Speeking of broilers 5 million or more birds were killed in the spring tornados this spring.

4. Turkey eggs in incubaters are starting to decline month to month.

5. Feed lots are sarting to empty and are not going to refill at these feed prices.

The only people these prices are good for are the grain guys. Livestock/poultry cannot withstand these prices for another year. You guys better be careful what you wish for!

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timetippingpt
Honored Advisor

Re: a few thoughts

Feels more like 1991 to us.

In looking at the data, both 1991 and 1995 yielded exactly at the 10 year average.

This seems very reasonable.

That would put the national at 149. I've been saying 153 for a few weeks now. Easy to see

149 with the heat persisting one more week.

This week will be the dagger that cuts deeply in any area that missed Sunday's rains.

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arnfarm735
Senior Contributor

Re: a few thoughts

What rain on Sunday???

 

I looked on the 24 hour rainfall estmate on DTN which ended at 7:00 a.m. Monday morning. There was not much rain except in parts of Illinois and a dab of eastern Kansas. I think the 10 - 15 % coverage hit it pretty close.

 

Our rule is that we don't even turn off the irrigation unless it rains more than a half of an inch.  But it is July and that is what we do in July. By the way it gets hot once in a while in July even before the media came up with that heat index nonsense. Every thing has to be a crisis.

 

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timetippingpt
Honored Advisor

Re: a few thoughts

We had zero as well. Just trying to be realistic that some people did get rain Sunday (puppydaddy for example got 3"). If you are like us, with no irrigation, and 2 tenths in the month of July, this week will be the dagger that cuts deeply is all I was saying.

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hardnox604008
Advisor

Re: a few thoughts

But gee Ken according to Monsanto and the NCGA lobbyists these new genetics don't need rain.

 

Gives me the willies when you mention '91- a catasprohic year for me. One of the things that year was very heavy corn borer prssure that was almost impossible to control becasue there were multiple flights or actually like continuous flights. Wierd year.

 

At least the borer ting won't be an issue tis year. Even nonGMO has benefitted greatly from the Bt. For the moment, anyhow.

 

Corn with bad roots and no rain plus a borer in most stalks= bad corn.

 

 

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