Short-Term Outlook for US Corn Demand
Aug 01, 2012
Corn traders are not only uncertain about "yields," but now seem to be extremely uncertain about "demand," especially with so many groups appealing to Washington for a reduction in the "Renewable Fuel Standard." Remember, the "RFS" requires 13.2 billion gallons to be produced this year. That places minimum corn usage at about 4.7 billion bushels. If the trade feels that number will be slashed sometime soon, we could definitely see some additional long liquidation. Moving forward into 2013 corn usage is lated to jump to around 4.9 billion bushels, a number that is also being carefully watched. Even though it seems high unlikely that US officials will make a move any time soon on the subject, just the thought of reductions has the ability to send some corn bulls running for the exit sign. There is also some talk amongst the "tech" crowd that the corn market is starting to look extremely tired. Special attention was noted yesterday as to how the corn market posted new highs on less volume and less open interest, often a sign of a market that is loosing steam. I would concur. Until we have more bullish data to digest traders will find it hard to add to their length at these lofty levels.
*Talking to farmers around the country: Hearing some good yield numbers out of "Central Arkansas" on early planted corn, some 200-240 type yields on good irrigated ground. Kentucky producers reporting yields as low as 20 bushels per acre on harvested ground to as high as 115 with test weights running about 55. Some corn already being harvested in Illinois producing 115-125 type yields with test-weights around 50 and 25% moisture. Producers in Nebraska reporting a lot of "silage" being cut on dry land acres, while irrigated acres seem to be hanging in there.
We are making some moves in response to what the market is showing us. You can sign-up here to receive a FREE trial of my Daily Grain and Livestock commentary in which you will see where I stand on cash sales and some strategies on how you can take advantage of "Money-Flow" and the Outside Markets. Just click here - Van Trump Report