Jalopy
Well-known member
It seems all signs are pointing to less corn produced in 2011. How will it effect you individually and the cattle industry? Or for that matter how do you think it will effect all livestock markets?
Less corn in 2011
- Thread starter Jalopy
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Due to the floods up north earlier this year or due to production being shifted to ethanol?
VanC
Well-known member
TennesseeTuxedo":2q3yv5tl said:
Can't vouch for everywhere but around here corn got in late because it was too wet. Lots of guys went to earlier maturing varieties because of the shortened growing season which reduces the yields. Then we didn't get any rain during the critical growing periods so that will reduce yields even more. Ethanol production is a factor, too. If the harvest goes well there will be a decent corn crop, just not as big as recent years. I have no clue how that will affect the cattle markets.
Jalopy
Well-known member
Poor production and fewer harvested acres are the reason for fewer corn bushels. Where these bushels go (i.e. feed, ethanol, or export) will depend on who is willing to pay for it at the time it is available.TennesseeTuxedo":31mvno0r said:
The Pro Farmer Midwest crop tour, indicates that there will be about 1-4% less bushels of corn this year but it doesn't really take into account all the failed acres in the flooded states.
Makes sense then that feed prices will rise ergo the cost of finishing beef cattle will rise. Doesn't bode well for the price of pork or chicken either.
user1
Well-known member
""Demand- or supply-driven?Bryan Doherty
08/26/2011 @ 3:49pm
Over the last ten years as the world has changed, so has demand. Increased migration of 50,000,000 to 100,000,000 people a year from third world status to middle class is helping to provide for an undercurrent of demand that the world has never seen.
So while demand is the backdrop of higher commodity prices, it's really the supply picture that has changed the fortunes for the corn market over the last 60 to 90 days.
Let's look at some of the variables. What you'll see is that many of the demand factors with corn are relatively unchanged over the last two to three months. However, what has changed is the projected crop.
Expectations for yield near 164 bushels per acre early in the season have now dwindled to somewhere probably close to 152 bushels. Using those figures and simplifying harvested acres down to 80,000,000 is a reduction of 960,000,000 bushels.
For practicality purposes we'll round and say the crop is 1 billion bushels less than maybe what it could have been. With a current carryout of 700 million bushels, that 1 billion bushels could have brought the carryout to 1.5 or 1.8 billion. This would very likely have corn futures trading sub-par at the $5.00 level.
End user buying would be less than aggressive anticipating a big harvest. Speculative interest would probably be uneventful, waiting for better signs of a bottom this fall.
When breaking down Supply and Demand reports in the USDA, we will compare this year's demand to last year's. The total figure for demand, or that is corn use, is 13.160 billion bushels, as compared to last year's figure at this same time at 13.245 billion.
Feed usage is down 100 million bushels at 4.9 billion, while ethanol is slightly higher at 5.1 billion versus 5.020 billion a year ago. Food, seed and industrial uses are mostly unchanged. Exports are now estimated at 1.750 billion bushels compared to 1.825 billion last year.
As you can see, total usage is down and suggests that prices should not move higher based on demand alone. Yet, it's the supply that counts, and with expectations that this crop could yet shrink, the market continues to trend upward.
Recent history would then suggest that the market finds plenty of demand at lower levels. This will keep prices from diminishing much in the year ahead as end users recognize that tight inventory could mean limited downside for price. For now, however, if a rally in corn were to continue, it would likely come on the heels of expectations for an even smaller crop.""
08/26/2011 @ 3:49pm
Over the last ten years as the world has changed, so has demand. Increased migration of 50,000,000 to 100,000,000 people a year from third world status to middle class is helping to provide for an undercurrent of demand that the world has never seen.
So while demand is the backdrop of higher commodity prices, it's really the supply picture that has changed the fortunes for the corn market over the last 60 to 90 days.
Let's look at some of the variables. What you'll see is that many of the demand factors with corn are relatively unchanged over the last two to three months. However, what has changed is the projected crop.
Expectations for yield near 164 bushels per acre early in the season have now dwindled to somewhere probably close to 152 bushels. Using those figures and simplifying harvested acres down to 80,000,000 is a reduction of 960,000,000 bushels.
For practicality purposes we'll round and say the crop is 1 billion bushels less than maybe what it could have been. With a current carryout of 700 million bushels, that 1 billion bushels could have brought the carryout to 1.5 or 1.8 billion. This would very likely have corn futures trading sub-par at the $5.00 level.
End user buying would be less than aggressive anticipating a big harvest. Speculative interest would probably be uneventful, waiting for better signs of a bottom this fall.
When breaking down Supply and Demand reports in the USDA, we will compare this year's demand to last year's. The total figure for demand, or that is corn use, is 13.160 billion bushels, as compared to last year's figure at this same time at 13.245 billion.
Feed usage is down 100 million bushels at 4.9 billion, while ethanol is slightly higher at 5.1 billion versus 5.020 billion a year ago. Food, seed and industrial uses are mostly unchanged. Exports are now estimated at 1.750 billion bushels compared to 1.825 billion last year.
As you can see, total usage is down and suggests that prices should not move higher based on demand alone. Yet, it's the supply that counts, and with expectations that this crop could yet shrink, the market continues to trend upward.
Recent history would then suggest that the market finds plenty of demand at lower levels. This will keep prices from diminishing much in the year ahead as end users recognize that tight inventory could mean limited downside for price. For now, however, if a rally in corn were to continue, it would likely come on the heels of expectations for an even smaller crop.""
I reckon the drought in Russia is having an impact as well.
Stocker Steve
Well-known member
Jalopy":m0xftxvb said:
Speculation was prices would drop below $5, now speculation is prices will go up. The highest price I heard was $9... :shock: Just be glad you own ruminants!
user1
Well-known member
larryshoat
Well-known member
user1":3cv55hqg said:
Ithink it could be ........or $3 corn, that could be too. I don't know about everywhere else but corn here is going to be less than what we've been used to, maybe a third less. We've gotten used to having some 200bu corn and this year it looks like 150 will be the "good" corn. So given the tight supply and what looks like a short crop $12 could be possible. As I listen to farmers across the country I don't hear many talking about having good corn. The internet has changed communication among farmers so much that when we start talking about a big corn yields and farmers across the country start saying "it ain't here" , I find that information although technically subjective, to be a very good indication of the size of the crop.
If Uncle Ben comes out with QE3, then I think corn will go above $10, if not then I think we're in a trading range. Keep in mind I'm wrong about 90% of the time, that 10% by the grace of God seems to be enough to keep the lights on and food on the table :lol2: .
Larry
