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| As noted below the stocks number was only about 150 mln bu heavy.. which they dumped into Feed/Residual demand.. which as of Dec 1 we KNOW that we had ALOT of BUSHELS out in the field... so...
Pretty hard for me to believe that they missed it by a billion bushels... in fact.. almost laughable.
If Lansworth were correct...(??) and production was overstated..and using their number of 12.38 then instead of pading Feed and Residual by 150 mln you would have had to reduce it by 570 mln bushels... or almost 10%
Things have been a little dicey on the livestock side of the Ag equation but I don't believe they were that bad.. I think the 150 mln bu gain is a little suspect.. but I think a good explanation is part of the crop was still in the field...
The Dec 1 STOCKS figure of which the Off-Farm number is reported directly to the Gov't FORCED them to recognize a crop... The STOCKS DON'T LIE... it's sitting in the bin.. it HAD TO COME FROM SOMEWHERE... and I don't believe you can explain away 600 mln bushels on test weight.
USDA might be a little high.. but I'm with Senior.. I think there was more than 150 mln bu out in the field on Dec 1... where is THAT production going to go on the NEXT STOCKS report in March? Not saying it... but it's possilbe that USDA is still a little light... splitting the differency maybe some over-estimation on tw.. but underestimation of what is still left to come... we could see a higher production number down the road.. Although I thought the crop was bigger than USDA said in November.. so this report was a "coming around" number for me. Now granted with the recent cold snap during this quarter.. the Feed and Residual number might take more bushels then first expected... but the cold snap came after Dec 1... so that will be dealt with in the March number...
Then again.. we harvested bin buster yields this year... not a given to occur again next year... 165 bpa 2009, 160 in 2004... next highest number is like 154 or there abouts... To fill a demand base of 13.5 billion next year.. EVEN if you ADD 6 mln harvested acres..(and that is by NO WAY a given..) you will NEED a 158 yield to hold things steady...
This crop report is not the end of the world.. I would not be surprised to see a rally to $5.00 this spring even if USDA raises the crop some more... As noted.. we have to "do it all over again" next year or we fall short. Now granted... if we do back it up again next year... then yal.. we could go lower... but right now.. I think the demand base deserves a break as they have been feeding/grinding high dollar corn for awhile... if the numbers are wrong.. this is a HUGE buying opportunity... (uhum.. for those still in business..) and the Lansworth's will be proven right in the longer term... wait and see.
All in all.. I think USDA is far more believable at this point in time... again the Stocks report will tell the tale. | |
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Lanworth's reporting numbers
