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| A reduction in supply does not equal a reduction in ending stocks. If the crop doesn't finish out well and national yield is in the 158-160 range, it is only logical to expect some cut in exports, especially since were not really that competitively priced now anyway and off to a real slow start in new crop bookings, and ample supplies elsewhere world wide. It is also only logical to a expect that ethanol plants in the yield affected areas might pull back the throttle a bit if supplies would dictate that to be a wise move. Any run toward $5,as you suggest (or even $4.50) if it appeared to be a move that would keep price maintained at thatlevel could easily result in animals being harvested at lighter weights, reducing usage. And those sinister endusers close to Wilmington have pencils and calculators and will source their needs from whomever has the most plentiful supplies and the most economic price. (That may be SA, if our US crop finishes weak)
Price dictates demand...... | |
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Why doesn't it bother the trade.
