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Frequent Contributor

crop insurance and prevented planting

With the price of dec.corn getting close to the insurance price will we get more prevented planted acres because there is no price incentive to try to plant it. I think with all the flooding and wet areas we struggle to get 90 mil acres planted to corn. Looking at yesterdays numbers that would cut carryout to under 600 mil bu.. I think the trade and the government are playing a dangerous game. End users are having a hard time buying corn right now I was offered option this morning from a cattle feeder but not really interested in selling.

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Senior Advisor

Re: crop insurance and prevented planting

I do think that these markets are probably in for a rude awakening and severe weather markets. The caveat is that very good weather ot get the rest of the corn planted and up is a possibility. But the margin of error is very small for the predictions made. By the time it is obvious that major targets will be missed we will be down the line a ways and no do overs.

 

Wheat looks very problematical. The problems are in exporting countries. Since Australia the production issue of quality hi pro wheat has been disappointing. The current forecasts by the USDA and others could not take into account recent developments that are sure to rock the boat. Canada is probabaly going to be a huge casualty on spring wheat. That is likely to be true for N Dakota as well. Meanwhile, I suspect the very recent high temps and wind sealed the fate of a lot of wheat in Kansas. And the EU is downgrading forecasts recently.

 

But if corn starts missing production goals the weather markets will be intense. IMO the markets have little appreciation for production risk. If it develops the market will be late reacting but will make up for it by the intensity of the reaction. July could be one for the books.

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Honored Advisor

Re: crop insurance and prevented planting

I agree. One just wonders if this latest "correction" has roots in raising of margin requirements for metals and oil, spilling into a grain markets if deemed too frothy.  I don`t know enough about "shorting" but if margin requirements are raised to own a commodity are they also raised to `short` that commodity?  If not it would appear that this is some sort of last ditch effort to prop up the dollar, to avoid raising interest rates.  With a $14T nat debt, raising interest rates from "zero"  to 5% or whatever would do some ugly things to the deficit.  One would think the USDA would tinker with keeping prices high to encourage planting of the fringes....then drop the hammer in July, with a "whoopsy-daisy! Looky all the extra stocks we forgot to count earlier".

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Senior Contributor

Re: crop insurance and prevented planting

I don't know if the USDA tinkers or are they just mathematicans that still have March's numbers written on the blackboard both planted and associated yields. They will not deviate from that until it is too late to achieve.  It will be very interesting to see just what will go into the ground by the end of the month. This week seems to be fairly shot with the rain and showers predicted through Sunday...MikeM

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Frequent Contributor

Re: crop insurance and prevented planting

Not sure what the rest of North Dakota/Canada looks like in spring wheat country, but I took a drive to Bismarck yesterday and was amazed at the wetness/lack of progress from the border up through Strasburg, Linton, and on to Bismarck.

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Veteran Contributor

Re: crop insurance and prevented planting

I think farther north the wetter it gets with few exceptions  where land and they may have handless moisture. Took a tour of NE Nd this week from Carrington to Cannada  ground is exceptionally wet water standing in many fields. Seen farmers trying to do some field work with leaving large area's to wet to work and some exceptional tracks from working in these fields. On average its going to take at least a week above normal temperatures and wind to dry these fields. Today here in Northern ND local radio station temperature at 2.00 o'clock is 37 degrees and other reporting stations around area are about 40 degrees and were experiencing light rain to misty showers so little drying is occuring today and probably for tommorow similar forecaste for tommorow. planting window is closing for us and little margin left for wet weather or none drying days. June 10 is longest you can reasonalbly plant without serious risk and that's 5 days past federal crop deadline for seeding before loosing coverage. I think market hasn't come to terms that not all this crop projected is going to get planted here in ND some crops may get their acreage by shifting to those crops by farmers. Going to be interesting couple of weeks ahead as this market comes to terms with these delays and effects this spring on ;planted acres and yield reductions that will likely occurr from these late planted crops also.

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