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What is the Upside on Corn?
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JonSCKs
Posted 10/9/2014 07:30 (#4116625 - in reply to #4116554)
Subject: Sorghum has a pretty good premium to corn.


It could just be that we are not far enough into the Sorghum harvest but the Sorghum bids are pretty significantly better than Corn right now.

Export bids for Corn are about +.40 to +60.  Meanwhile Sorghum bids are around +1.26 at the gulf down to +.90'ish after the first of the year.. so that's pretty stout.  Hutchinson terminal has about a +.20 premium for Sorghum right now over Corn..  However as we move out to Western Kansas there is still a pretty good discount for Sorghum to Corn.

It's hard to get an early premium for Sorghum.. but we are exporting a good chunk with USDA looking for about 200 myn bushels in exports again this year.. almost half the crop of 430 myn bushels.  I know a good chunk of the state may see better yields than last year.. here in the central part.. we had pretty decent yields last year.. so it might be hard to match that.. the late summer dryness kind of put the kabosh on the high yield potential.. but we're still going to raise a good sorghum crop.

I've been saying that we are NOT going to stubble back much wheat.. but there's a fair amount of smoke on the horizon.. it looks like guys are more concerned about input costs for the more expensive crops such as Corn and Soybeans.  I like what Chip's guest on Market Rally said yesterday.. "Wheat is only 200 myn bu of additional export demand away from a very tight market."  Golly if it wasn't for all the wheaties pouring in from up north..(Canada) things would be a lot tighter..(?? maybe we don't see all 170 myn bu projected..??)  It does sound like some of our competitors are easing up on offers..??  With the rains coming in.. we may turn a little more wheat around than I expected.. just depends..??

Guys are starting to hammer down on the final stretch of Corn harvest here.. Harvest bushels will be drying up soon..  About 3 or 4 more good days would wrap 95% of it up or thereabouts here. 

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