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| Interesting to note the similarities in 2010 vs this year. This crop has a long way to go before the traders get a good taste of where this crop is going to land although most already know. I vehemently disagreed with Waterstreet last year at projecting a 178 but believe they are close this year. Comments below are from Waterstreet this afternoon. Note price projections if we have the finish anticipated. I told a large farmer he would sell $5 corn in the next year this past spring. He kind of looked at me strange but I think we chased enough acres away that it will cause some pain in the end for those that want corn and not feed wheat. Bullish acres at $4 doesn't happen, price will rebound in the end.
"The crop rated a condition index score of 374 (500=perfect crop), matching the previous week and matching the same week in 2010, down from 387 the previous year, but up from the 10-year average for the week of 348. Missouri’s crop score lost 5 points to 335, while North Carolina was down 4 points to 313. Kansas and Pennsylvania both lost 3 points, while Colorado was down 2 points and 1-point losses were seen in Kentucky, Minnesota, Nebraska and Ohio. Crop ratings were unchanged in Illinois and Texas, while up modestly elsewhere.
My seasonally adjusted corn yield model comes in at 171.6 bushels per acre, down slightly from 171.7 bushels the previous week. However, a state-by-state assessment of crop conditions, harvest reports, etc. lead me to stay with my estimate of 161.0 bushels per acre, as yield models tend to overstate yields in years with excessively wet conditions in the first half of the growing season. Such a yield would drop marketing year ending stocks closer to 1.14 billion bushels, arguing for spot futures to top $5, likely later this year, assuming the outside markets don’t react to severe fear pressures once again.
Traders were disappointed by the failure of crop ratings to break amid all the reports of a poor finish to the crop, but similar dynamics were seen in 2010. As such, breaks found willing buyers to limit losses throughout the session. A 3-cent pull back is minimal considering the 35-cent gains we’ve already seen posted in recent days. Yield data continues to support a tighter balance sheet in October, suggesting good support for the market. Harvest reports should be the primary driver as long as the outside markets behave over the next several weeks. " | |
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Closing market comments
