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Mizzou_Tiger
Senior Advisor

so VR and Ray

What was the highest cash price for October delivery of 2011 corn........

We all know that 8 was attainable for 09 and 10 crop sold into last summer.......many rewarded the market.......but for 11 crop, what was the highest cash price offered for October delivery.......not August or even first half of Sept.........

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8 Replies
Mizzou_Tiger
Senior Advisor

Re: so VR and Ray

Edit...and as of today you can sell cash over 7 for 2011 crop......and it has been as high as 7.34 back in Jan.......

You telling me you could sell new crop 2011 off the combine CASH for more than that........
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Farmerjoe79
Senior Contributor

Re: so VR and Ray

One sold to much and the other is not buying enough, so why not get negative. I just have a feeling when the ratings come out next Monday it's going to be hard to stop the bullSmiley Happy
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rayjenkins
Veteran Advisor

Re: so VR and Ray

Yessir, MT.,..

 

the high on December 11 futures was around 7.75 and our October basis varied from +10 to -25Z

 

so lots and lots of opportunity to have sold corn for more than $7, some of it for over $7.50 depending on when futures and basis were established....

 

we had $7.50+ cash bids in many time slots from December 11 through July 12, and they were available for a pretty good period of time, not just a day or two....

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jec22
Veteran Advisor

Re: so VR and Ray

Seeing the highs of last summer/fall.  Knowing that some guys have held for nine months, and have some storage expense:  adding to that the dry conditions, it hardly seems like a buck under last year should hold this rally.    And if one cannot price 2012 crop for more than 2011, things are really screwed up.  Why would we talk of rationing, when we are still a buck under last year?

 

Simple math. 

 

This is a big week.  4th of July.  Seen it go both ways.  Dry, and then the 4th brings saving rains than turn the trend.  Also have seen rivers flood on the 4th and that be the last rain for weeks...ugly, ugly.  GAME ON.

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Mizzou_Tiger
Senior Advisor

Re: so VR and Ray

Cash
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rayjenkins
Veteran Advisor

Re: so VR and Ray

jec22------you guys need to get over 2011.......it was a unique set of circumstances that created $8 corn......it was all about risk-on mentality and global funds pouring money into commodities.....the simple fact of the matter is that corn was over-valued in 2011 due to extraneous factors----a bubble if you will...good for you guys.....

 

I have no idea where we end up because of the weather....but the pain is coming on early and often

 

just don't try to extrapolate the fact it went to $8 last year into this year's reality.....

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jec22
Veteran Advisor

Re: so VR and Ray

Ray, you may be right.  But in years with severe crop damage, ie 1993, the market is usually behind the eight ball, and does not start it's real rally until November.  The market usually underestimates real damage and overestimates perceived damage.  We just don't know which one wins yet.

 

You can argue against 8.  But there is a strong case to be made with livestock prices so high that six should be a floor.  You can also argue that the Europeon problems have kept a lid on this market, more than the last year was a bubble line.  In fact, if you take the Euro problems away, I would say corn is over 8 today.  The Euro problems and strong dollar have kept the lid on.  And it may keep the lid on for a long time, that is the big cloud over head. 

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GoredHusker
Senior Contributor

Re: so VR and Ray

There's a little more to it than just Europe and a slightly higher dollar.  Domestic gasoline usage has been relatively weak.  As people use less gas, they also use less ethanol.  Even though livestock prices are high, one has to break each down by class.  Cattle by far use the greatest quantity of corn.  Between the drought last year and this year, the cow factory numbers are evaporating.  According to JR., the dairy numbers are evaporating as well.  New crop corn exports haven't exactly been robust considering Brazilian corn is quite a bit cheaper in the World market.   

 

You may very well be correct that without said problems corn would be over 8 today, but unfortunately those problems do exist.  As said before, futures highs in drought years almost always occur between the June-August time frame.  Last year, the futures prices were higher when the crop was thought to be 2-3 bushels per acre higher than what it ended up being. 

 

It is conceivable that corn demand for 12/13 will be lower than demand has been for 11/12.  I highly doubt the problems in Europe get fixed or get fixed anytime soon.  The only thing one can really hope for in terms of seeing corn trade close to 8 bucks is for Helicopter Ben to unleash the juice.  I do expect to see another round of QE, but I don't think it happens until after the election.     

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