Sep 20, 2014
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Current Marketing Thoughts

RSS By: Kevin Van Trump, AgWeb.com

Kevin Van Trump has over 20 years of experience in the grain and livestock industry.

With Latest USDA Corn Numbers, Battling Price Can't be Main Focus...

Jul 14, 2014

Corn has fallen by over -$1.30 (new-crop) since the May 9th high of $5.14^6. The trade continues to focus on the "supply" side of the equation as US producers enjoy near ideal growing conditions.  The talk inside the trade is if the weather continues it's current trend (which looks to be the case for the moment), the USDA will be forced to drastically increase their yield estimate in their August 11th report (a 168-172 bushel yield number seems to be most of the debate).  This in turn has the trade talking about a 14.0 billion bushel plus US corn crop and an ending-stocks number north of 2.0 billion bushels. As for price, many technicians seem to believe new-crop DEC14 should start finding some good support in the $3.50 to $3.75.  On the flip side many of the bearish fundamentalist believe as long as wheat prices continue to slide so will corn, possibly all the way down to between $3.10 and $3.35 before it finds more heavy cash demand.  As producers we can't necessarily battle "price" at this stage of the game, but we can continue battling "production."  From my perspective, it's going to be vitally important that you take the extra steps and do everything you can to secure the current condition of your crop.  Get with your agronomist or local ag retailers and find out what's the biggest bang for your buck (fungicides???) and try to do whatever you can to insure the biggest crop possible. Remember a -30% reduction in price from $5.00 will drop us down to $3.50, but if you can take your field from 150 bushels per acre to 195 bushels per acre, you have essentially offset ALL of the price break (in other words it would be just like selling 150 bushel corn at $5.00).  CLICK HERE for my daily report...      

What You Need To Know About USDAs Most Recent Corn Numbers: The USDA made several changes this past Friday below are a few that believe you need to fully digest: 

 

  • Global corn ending stocks pushed higher by 3.5 MMTs. Currently at 188 MMTs and now the highest level since 2000. Brazilian corn production estimate raised higher from 76 MMTs to 78 MMTs, Chinese and EU corn output also raised higher.  
  • Corn for "feed usage" was drastically reduced in both old and new-crop balance sheets. Old-crop demand for feed usage cut by -125 million bushels and new-crop lowered by -50 million bushels.  Old-crop corn used for ethanol was actually raised higher by +25 million bushels. 
  • Yield for new-crop corn was left "unchanged" at 165.3. This now has many sources inside the trade thinking if weather continues to cooperate and the overall conditions of the US crop stay at or around these levels then the USDA could make a massive push higher in the August report, perhaps closer to 170 bushels per acre and ending stocks closer to 2.2 billion.                CLICK HERE for my daily report...            
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