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SC Iowa | My mantra this winter has been a theme of "what does it take to get 90 myn acres of corn planted in 2010"....when the corn/bean ratio (new crop months) was nearing 2.6:1, it looked a lot more difficult than it does tonight with a ratio of 2.23:1
Although I've expected Dec 2010 corn futures to make a trip or two above 4.50, that hasn't happened except for one day we traded up to 4.52, and it's starting to wear me out to point I think having 25% of new crop sold here between 4.45-4.50 ahead of the report is warranted.....not everyone is thinking the crop size and carryout will be smaller in Tuesday's report, and history shows the last couple of times we had crop left in the field on Dec 1, the crop actually got bigger in subsequent reports...
Corn farmers need to keep an eye on the global sugar market, now trading at 25-30 year highs as the wet weather and harvest delays have had an effect.....in Brazil, some of the mills can make either sugar or ethanol, with the high price of sugar encouraging a bit less ethanol production to the point the govt mandated level of alcohol in gas may be reduced.....stay tuned on that.....could the US end up being able to export some ethanol this year??
I've felt if the bean market breaks this winter on a huge SA crop, and Nov beans drop to lower 9's, then getting 90 myn acres of corn should be attainable at 4.25 or higher Dec corn futures....note that Monsanto came out with an 88 myn number for corn last week or so...
Carryout----I feel the need to separate out the fact that we have 4.3 byn corn used for a "non-food" use, which means to me that if supplies get tight enough that one or both of the following can happen: first, prices rise to the point that ethanol becomes unprofitable in the short run...second, mandates can be rescinded short-term and a way found to get corn to the food/feed uses to dampen food price inflation......
So carryout means something far different now than what it did 10 years ago....
Jon, we are working on travel plans for later this month....I believe we are going to be in your area on Thursday, January 28....any idea if you will be around??
Ray J
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Transportation woes and basis....
