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Mizzou_Tiger
Senior Advisor

updated shipments, cotton, $7 corn, $13 soya, acres......MARCH 5th......wow....

 currentpreviousactualprojecteddifference
 yearyear%%%
 shipmentshipmentof previousof previousof previous
wheat74238988410483.97077719767.970777194
corn83556085021898.27597157935.275971574
soya907771118064676.8876530385-8.112346969

 

Soya are closing the gap even more, as mentioned for months now, expect that to continue..........corn and wheat still pacing ahead..........cotton was limit up on what sounds like export bans from India?????...........depending on your basis cash corn is above $7 or very near it for some...........soya are well above $13..............

 

Brush up on your acres...........we have wheat, cotton, milo, soya, and corn all bidding for acres..........

 

Would any bears be willing to share why corn is not at $4 or $3 now..........I mean we are going to plant 94M plus right.............just like an explaination as to why...........last fall the sky was falling and we were headed for a cliff, right?????

 

That said we are nearing levels in old crop corn that warrants a look if you have bushels that need to be moved..........I still see more room to run by this summer with old crop, especially in deficient/aflotoxin areas, however some need the cash soon............soya are probably getting top heavy, but I still think $14 is a real possiblity, again not a bad place to start in.........like someone said, I would expect a blow off top, so have your speed dial ready..........

 

New crop is a bit more tricky..........soya likely warrant a look, corn I think needs to run some more...........

 

Good day........

 

 

 

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26 Replies
Doug N
Veteran Contributor

Re: updated shipments, cotton, $7 corn, $13 soya, acres......MARCH 5th......wow....

Can someone please explain to me how 2 people can take identical numbers and come up with 2 basically opposite thoughts from them?  How are soybeans closing the gap even more when they shipped 7 million less bushels than the previous week?  Also, is there any seasonality to the shipments and sales?  Are there certain times of the year where more or less grain ships are is it kind of a flat line. 

 

It really makes it hard to tell whats going on with the exports when you get differing takes on FACTS. 

 

 

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GoredHusker
Senior Contributor

Re: updated shipments, cotton, $7 corn, $13 soya, acres......MARCH 5th......wow....

As good as that all sounds, we're still quite a ways from where we were about a month before harvest.  In that time frame, 7.50 corn was available as well as 14.00+ on soybeans.  Unfortunately for me, cash corn is 6.41 posted at the close and cash soybeans are 12.23 posted at the close.  The highest priced cash corn I've ever sold was last July for 8.01.  I don't see that in the cards this year unless something dramatic occurs.  I do agree that new crop beans should be looked at pretty hard in here while corn should have upside.  There was a lot of spreads put on by buying beans and selling corn.  Eventually, these spreads will be unwound.  I'd say there's an outside chance of locking in new crop corn for 6.00 assuming a 50 cent under basis.  USDA has a knack for understating corn acres on their March 30th Acreage Report. 

 

The one thing that concerns me more than anything right now is for corn to blow off.  When this happened last year, a huge local enduser to the west a ways dumped a few million bushels of contracted corn onto the open market.  Basis went from 45 over to 20 under in a matter of 10 days.  With ethanol stocks some 5 million barrels above normal, a few ethanol plants might decide they can make more money selling corn than storing corn waiting for their ethanol barrels to be pumped out.  The guys who waited until the August/Sept time frame to move corn locally last year lost a tremendous amount of basis.  Holding corn too long this year might yield similar results.   

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roarintiger1
Honored Advisor

Re: updated shipments, cotton, $7 corn, $13 soya, acres......MARCH 5th......wow....

Other than needing quick cash, why would ethanol plants be willing to sell corn that they already have booked?  Seems to me that they will have to pay much more later on to replace it.  Unless they aren't planning on replacing it until the new corn comes off.

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Mizzou_Tiger
Senior Advisor

Re: updated shipments, cotton, $7 corn, $13 soya, acres......MARCH 5th......wow....

Doug, if you use the other posters methodology.............take last years numbers, year to date..........divide it out like he did this years number, multiply it like he did this years number..........you get 1.67B...........ergo, if he is right we should have only shipped 1.67B last year, however according to the WASDE we shipped over 1.8B..........

 

I am simply comparing last years pace to this years pace taking into account a downward adjusted projection from the WASDE numbers............

 

As for soya, we have gone from 22% behind to 8%.................thats closing the gap, and it will continue to close...........

 

 

 

 

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GoredHusker
Senior Contributor

Re: updated shipments, cotton, $7 corn, $13 soya, acres......MARCH 5th......wow....

The reason would be because their barrels are full of ethanol which has slowed their grind down.  A few weeks back, I read a report that stated over 95% of the nation's ethanol storage was full.  In the meantime, ethanol stocks have continued to climb.  The real question here is why would ethanol plants sit on corn they may have purchased for 5 bucks rather than sell it for 7 bucks?  They work on margins.  In a general area where an ethanol plant is the one and potentially only major enduser, dumping corn onto the open market could open up a great opportunity.  While it might very well not take futures price lower, it could dramatically affect the local basis in the area.  Then once their current supply of ethanol is reduced, they could purchase back corn at a lower price and continue their grind.  I have no doubt they'll replace the corn, but this way they get to sell it back on the market for a profit and not have to store it until they get their excess inventory gone.  I have no idea how many or if any will do this.  One of the local plants has opted to hold their cheaper boughten corn and simply pulled their bids until new crop.  Typically, they only buy two to three months out.  This tells me they anticipate running at roughly 50% capacity for an extended period of time.  Another local plant shut down, so I'd guess they've already started dumping their contracted corn on the open market. 

 

 

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Mizzou_Tiger
Senior Advisor

Re: updated shipments, cotton, $7 corn, $13 soya, acres......MARCH 5th......wow....

Gored its March.........we are a long ways from this crop in the ground let alone a month from harvest..........and areas are already in the $7's...............

 

I am still waiting for a BEAR to tell me what went wrong and why we are not at $3 and $4 yet.............

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Doug N
Veteran Contributor

Re: updated shipments, cotton, $7 corn, $13 soya, acres......MARCH 5th......wow....

Thank you for the explaination. 

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GoredHusker
Senior Contributor

Re: updated shipments, cotton, $7 corn, $13 soya, acres......MARCH 5th......wow....

My point was my local cash price for corn is roughly 1.10 lower today than it was a month before harvest.  When one takes storage into consideration, it makes it look even worse.  The other point is that it doesn't always pay to store.  If gas prices do what some analysts are predicting, we very well could see a repeat of 2008 all over again just a few months earlier in the year.  If I was sitting on large quantities of old crop corn, I'd be getting a little concerned.  It's quite likely the best cash prices past us all by around the first of September on the 2011 crop.  If not, the World economy is stronger than I think.     

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Mizzou_Tiger
Senior Advisor

Re: updated shipments, cotton, $7 corn, $13 soya, acres......MARCH 5th......wow....

for Oct-Dec11 delivery of corn..........what was the highest cash bid in your area??????

 

 

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