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SC Iowa | Jon, I think your last statement "believing you had seen it all" will be uttered by many of us in the next decade....the one I keep repeating in conversations goes something like this "could you have possibly imagined that gold would be $1300 per ounce and interest rates be near zero?" For those of us who lived through the 70's and 80's, that just seems like an impossible combination.
A few comments:
1) I doubt we did anything in the J/J/A time period to seriously affect grain stocks....if we did it was in the last 30 days of the period.....don't know of any ethanol plants cutting rates, livestock being liquidated, or exports being curtailed in the last quarter of marketing year...
I will tell you it "felt" like a pretty adequate supply of corn available in late August this year.....the year long quality issue had those of us who "have" to have corn everyday a bit nervous, but the only thing that did happen at our shop was the need to reject 10-25+ loads a day for bugs and damage
2) Barges......that may have been more of a red herring than anything.....haven't heard much about that, but then again, we've been harvesting corn in Illinois and south for almost 30 days.....would have been interesting to compare how much corn is being held on barges while in transit vs. the numbers that were put out about corn being "stranded"......maybe the difference wasn't all that great??
3) DDGS.....not an easy product to store....doesn't flow like good heavy grain.....railroads require it to be moved in "privates" as they got tired of having their company owned hoppers beat up by efforts to get the product out......so I have my doubts about massive quantities being stored "somewhere".....China has done a real good job of sucking up DDGS supply.......5 years ago we were going to "have to dump it in the ocean".....today, life goes on and it's just another feed ingredient being traded in the global market....
4) Remember when we had government reserve programs and the last of those supplies were always being held in the northwestern cornbelt where basis was traditionally soft?? Deja Vu all over again??
I think the key is looking at growth of corn production in the plains states, especially in relation to historical grain storage....when you move from 45 bushel wheat crops to 125+ corn, you have an exponential need for space and it's no big shock we have grain on the ground....
5) Lastly------we have created a system that requires fairly steady supply of grain 24/7/365......ethanol, sweeteners, livestock---you name it....even exports fit that pattern to a great degree.......so it's no surprise that we can/should feel very flush with supply at harvest---while wondering how thin it might be 11-12 months out, especially if we were to have harvest delays in 2011.....
Ray J | |
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Grain stocks article..
