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hwr247
Senior Contributor

corn for ethanol

Was listening to a talking head grain advisor on agday that said corn carryover will be 4billion bushels with the loss of the ethanol market which would leave the price at 2.20-$2.60!  Take another $.50 off for basis and you can see a 1 in front of the price!  i havent seen that since the 80's ag crisis! And yet he was saying that an acreage set aside would only help SA fill our void. That may be true so why doesnt the President bitch and complain about their currency manipulation?!  i guess ag isnt big enuf to matter now even with the money being thrown at the problem. The global giants could care less as they are situated in SA and business hasnt been better. Pretty sure they have their hands out for cheap money courtesy of good ol uncle sam!

10 Replies
rickgthf
Senior Advisor

Re: That's not your only problem.....

The answer for both corn and soybeans is ethanol and soybean exports to China and right now trump  is threatening to sue China for damages from coronavirus.  Despite the fact that the Chinese are rational people and understand that his threats have no legal merit and are simply political pandering to his base, the Chinese are people, too, and can't help but feel annoyed by his threats.  Any inclination they might have had to honor the Phase One deal is gone.  

The truth is, land clearing in the Amazon has accelerated under Bolsanaro and now coronavirus has removed any government push back.  The reports are that the land grabbers have moved into the Amazon in force. Previously, Brazil increased its soybean/corn planted area by about 5% per year. I wouldn't be surprise that it's 10% this year. Remember the Brazilians get two crops per year, one soybeans & one of corn.  At this rate, within 5-10 years Brazil will be able to supply all of China's corn & soybean needs.

  So you can pretty much count as a loss 25% of our soybean demand and any future demand for ethanol export as well.

 

   

sdholloway56
Senior Advisor

Re: That's not your only problem.....

This thing is now FUBAR through and through.

But there will be election year payments and a new program of some sort next year.

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clayton58
Veteran Advisor

Re: corn for ethanol

How does corn with a one in front of it incentivizes South America or anyone else to grow more

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bruce MN
Advisor

Re: corn for ethanol

An old concept to a great degree.

Consolidated end user production.

Most of the farms around the old home place where I grew up operated totally without the marketing of any commodity grain when folks my age were kids. It was a topic worth mention when there started to be grain hauled to town for purposes other than being ground for feed to be hauled or delivered back, or as seed for cleaning. 

Just what went around coming back around. 

rickgthf
Senior Advisor

RE: When the land is free and you get two crops a year, that changes the break-even.

When the land is free and you get two crops per year, that changes the break-even.

  We did the same thing to the English during the mid-1800's with the price of wheat.

clayton58
Veteran Advisor

Re: RE: When the land is free and you get two crops a year, that changes the break-even.

So our big issue is land price is too high. How do we compete with free land?  And  how do you stop people from bidding all the profits into land price?

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elcheapo
Veteran Advisor

Re: RE: When the land is free and you get two crops a year, that changes the break-even.

For heaven sakes...dont talk about

Devaluing land prices....that is

The only thing holding things together

In the ag sector.

 

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hwr247
Senior Contributor

Re: corn for ethanol

I didn’t mean corn with a 1 in front was good. What i meant is cheaper  corn  will happen here if  the dollar stays strong and their Real stays super cheap making their commodities a huge bargain for china. It would be the same for us if the dollar fell to levels in the great recession of 2008-2009. 

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WCMO
Senior Advisor

Re: RE: When the land is free and you get two crops a year, that changes the break-even.

Seriously, if ethanol usage stays down, feed usage is less, exports are low, and the acres get planted, where is the corn going to go, both physical product and price?

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