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| Was it the light test weight corn? Probably. Underestimation of demand? maybe.. Are stout holders rebuilding their gambling stocks? that's possible also. Or the Government policy wonks pulling strings a little too hard? (always a conspiracy theorist out there...lol)
In January we were screaming higher.. and that report threw a little cold water on all us bulls. There were/are some livestock guys out here who were nearing the end of the rope... feeding $4.00 corn to cattle during a recession does not "pay the bills."
Things have improved.. margins are a little better for users of grain.. The economy hasn't fired yet on all eight cylinders but we've seen.. good weeks.. up to even a month or two now... (checking the Dow.. okay.. "still soft") However, the demand base has come through better than otherwise could have occured.. and we didn't run out of grain.
Last year my area.. had a wonderful crop.. even the dryland corn did "pretty good." We dumped the most amount of grain on the ground ever locally. we've just come through a "decent" wheat crop with above average quality so the food stocks of grain are very adequate. Here we are "a little nervous" about the dryland conditions.. cool and somewhat wet spring turning into a cool and somewhat dry summer.. Locally we will need a rain soon to maintain good growing conditions... "not looky as rosey" right now as last year... but..??? Things can change.. for better.. or worse... and on the farm our bins are only 20% full.
Just when we thought we wouldn't see a weather market.. USDA serves up an ace.. NOW things are going to become interesting.. "Here" we aren't doing as good as last year.. and we just found out that last year wasn't as good as we thought. So plugging in some more "realistic" numbers into the balance sheets makes the fourth of July a little more lively.
I don't know what will happen... and I don't play a market analyst on tv either...
A lot of people holding inventory have been waiting for a 2nd or 3rd or 4th chance... You heard the story about the farmer who found a genie and rubbed the lamp? For his first wish he asked for a NEW Tractor... presto... 2nd wish.. well he needed some $$$ to pay for it now.. how about $5.00 corn... third wish? Uhum... "how about $5.00 corn again... "
and the genie said.. "didn't you ask for that the LAST time?"
To which the farmer replied... "yal I know... THIS TIME maybe I'll sell some."
lol.. isn't that the truth?
Heck I don't know if another $.05 is even in the cards.. but this has the feeling of having some legs... whether or not it actually runs and to what level....???? I'd ask my genie if I had one... which I don't.
China has bought/is buying... livestock margins have improved.. economy is on the mend... a World of opportunity from the ethanol side of things... gulf oil spill, an administration that says it wants to get off imported oil... just like the last one... and so forth. It looks like we're going to need some more grain... and mother nature better be kind or someone is going to get caught short.
A world where the USDA genie gives a farmer who wouldn't sell a 2nd or 3rd or 4th chance... "what a country." They could have waited until harvest to revisit the test weight issue from last year... then again... maybe the bins are too empty.. afterall you can only bluff your way for so long... it's a pretty big demand base.. buyers sooner or later are going to have to pry bushels out of someone's hands... before Mother Nature stops the music.. and someone doesn't find a home to pull from.
Happy fourth of July! | |
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Corn stocks tell the story.
