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Galahad, Alberta | It makes for very good reading on this site for me to listen to American farmers talk about the ethanol factor and what it has done for your commodity prices. I know the "shift" of acres up to 90.5 mil is just a number, but it is what the industry has to use for the time being. I'm curious why no one is talking about corn carryout stocks. My "pro" is using a number of 900 mil bushels less than last year. Isn't that going to make things a little tight? I also hear the magic number for yeild is 152.8. Again, hard to argue because no one knows how the shift acres will perform. Throw in a wet, cold spring, DT's El Nino, and we colud be in for a wild ride.
But my real question is this. An acreage shift of about 13 mil out of other commodities should eventually lead to a rise in the price of those other commodities. So that should, in theory, pull those acres back to the other commodities. That will leave corn even tighter, and, with more ethanol plants coming on stream, an even greater demand for the corn. So does anyone have a guess as to when the prices of all the other competing commodities will rise? 1/2 a year? 1? 2? Before the next planting(buying acres). I know wheat is no great price right now, soybeans and by extension, other oil crops, are undervalued. I know nothing of rice or cotton, but if people are leaving them for corn, they can't be great.
Sitting in my office, watching it snow, Rosco | |
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How long for the trickle-down effect??
