My Thoughts on Corn Yields and Cash Sales
Aug 20, 2011
Last week, the grains and soy seem to be holding their own despite the financial uncertainty in the global economic markets. Russian wheat prices are quickly moving higher. US soybean production is reaching a "critical" stage still with limited rainfall in many key growing regions. US corn yields are being carefully evaluated and predictions being finalized as we get closer and closer to harvest. I continue to look for the breaks to be supported until more factual evidence is know about the crop.
If you are looking for a specific number, I have heard of several "Big Boys" talking about being buyers of December corn on a setback to $7.05, therefore this area may prove to provide some additional support. As far as upside, I continue to hear most bull's looking for a move beyond $7.50, and possibly approaching $8.00 before enough premium has been added to accommodate the lower yields. Soybean could push through $14.00, and eventually look to test the $16.00 range if limited continues.
I certainly don't want to rain on anyone's parade, or be the guy that announces this phase of the party might be winding down, but I have had the opportunity to speak with several producers the past couple of days who currently have "crop scouts" in the fields, and they are telling me that their corn might not be nearly as bad as they once had anticipated. I am not saying this is the case for everyone, but this is coming from a fairly large sampling of clients in several key states. From what I am being told, "blanks" in the ears have allowed the kernels to gain a little more depth, and several are now talking about much better test weights than they were thinking a couple of weeks ago.
Random ear weight samples in some high producing areas are now much higher than they were as well. Random ear weights, calculated with the cob and with moisture on the highest hybrids seem to be running about 9.0, and the lowest hybrids around 7.2. Many producers figure they will gain weight at the same speed they are loosing moisture, at least until they reach black layer, therefore you have to believe there may end being more bushels in certain areas than we have counted on. Don't get me wrong, there are still going to be fields in Illinois, Iowa, Nebraska, Indiana, etc... that still only produces 90 to 110 bushels, and our national yield numbers should certainly not go higher from here, I am just thinking the bottom end is starting to stabilize and firm back up a bit. In fact, many of those producers who took the extra precautions and side dressed like crazy, sprayed the fungicide at just the right time, simply may not end up being as bad as they had anticipated.
Just in the past few days, several producers I have spoken with have bumped their estimates back up during the past week, very few have gone lower. I do not want to waver back and forth, but I am now starting to think the USDA....
With the extreme volatility affecting the markets and grain prices, you need someone to help you position your operation to make wise cash sales and set-up proper hedges. Sign-up to receive my FREE Full report in which you will receive my personal cash sale recommendations as well as gain access to my full Marketing Strategy. Remember, the markets don't react to fundamental news like they use to, in the FULL report, I bring you the inside scoop on what the Big Money players (Hedge Funds/Managed Money) are watching and how to take advantage of it! Simply follow the link below. You can also click the button below to follow my Team and I on Twitter and get daily updates on what is happening in the grain and livestock markets.