West-Central Missouri |
And Look at the demand side.
On the August 10 USDA S & D numbers USDA dropped ending stocks on corn from 1183 to 650 million bushels. I do not know if that included new crop corn already harvested so i will leave that where it is as that is not my point. What I am mostly getting at is the demand side of the ledger.
I am of the opinion that USDA believes that 650 is basically "0" and we cannot go below that without the pipeline sucking air and stopping demand. So that number will not go much below that, Even if we go to an 8 or 10 bil. bushel corn crop. Because it would be physically impossible.
So what we need to focus on is where the demand rationing is coming from and how it will come.
So the big question is how will we lose demand. Thru the market doing its work and causing herd liquidation, eth. plant idling, export reduction due to price or lack of capital around the world , a few more imports?
Or thru intervention such as export bans, ethanol shutdown(I will admit that I do not know how the gov't can force an ethanol plant to shut down if it can run profitably without mandates.) Or something we have not thought of yet?
I guess the point I am trying to make is that the USDA is correct in setting the demand to match supply plus leave a little in the pipeline. Because there is no other way to make it work out.
Here is how the Report on the August 10 compared to the following dates:
1 yr ago. (11/12) 1 mo. ago (12/13)
Imports -55 -45
Feed -825 -725
Other Domestic -660 -470
Ethanol -600 -400
Exports -450 -300
USDA Supply & Demand Tables - Updated August 11, 2011 |
| USDA Corn Balance Sheet | 2010-11 Crop | 2011-12 Crop | July 12 | August 11 | July 12 | August 11 | Million Acres | Planted Acres | 88.2 | 88.2 | 92.3 | 92.3 | Harvested Acres | 81.4 | 81.4 | 84.9 | 84.4 | Yield (Bu. per Acre) | 152.8 | 152.8 | 158.7 | 153.0 | | Million Bushels | Beginning Stocks | 1,708 | 1,708 | 880 | 940 | Production | 12,447 | 12,447 | 13,470 | 12,914 | Imports | 30 | 30 | 20 | 20 | Total Supply | 14,185 | 14,185 | 14,370 | 13,874 | Feed | 5,000 | 5,000 | 5,050 | 4,900 | Other Domestic | 6,430 | 6,420 | 6,550 | 6,510 | Ethanol for Fuel | 5,050 | 5,020 | 5,150 | 5,100 | Total Domestic Use | 11,430 | 11,420 | 11,600 | 11,410 | Exports | 1,875 | 1,825 | 1,900 | 1,750 | Total Use | 13,305 | 13,245 | 13,500 | 13,160 | Ending Stocks | 880 | 940 | 870 | 714 | Avg. Farm Price | $5.15 - $5.35 | $5.20 - $5.30 | $5.50 - $6.50 | $6.20 - $7.20 |
| USDA Soybean Balance Sheet | 2010-11 Crop | 2011-12 Crop | July 12 | August 11 | July 12 | August 11 | Million Acres | Planted Acres | 77.4 | 77.4 | 75.2 | 75.0 | Harvested Acres | 76.6 | 76.6 | 74.3 | 73.8 | Yield (Bu. per Acre | 43.5 | 43.5 | 43.4 | 41.4 | | Million Bushels | Beginning Stocks | 151 | 151 | 200 | 230 | Production | 3,329 | 3,329 | 3,225 | 3,056 | Imports | 15 | 15 | 15 | 15 | Total Supply | 3,495 | 3,495 | 3,440 | 3,301 | | |
Edited by gbryce 8/15/2012 21:15
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I think we need to forget about ending stocks for a bit.
