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Middle Tennessee | I threatened to stop boring you guys, threat still stands, but tonight, I posted below to my blog,
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Usually folks avoid dwelling on big questions, at least partly because pondering the meaning it of it all is worse than useless, leaving us feeling confused and vulnerable to no resolution. With a US corn crop disbursed in space and time like no other, it probably doesn't make sense to over think the USDA's projections of 89 million harvested acres. After all, we went through the exercise of debating acres lost to floods, it seemed the resolution was always around the corner with the next insurance-filing release or USDA report. I can't remember how that ended, but its better to limit endless conversations than to be devoured by them after all. And I don't know how much more can be said to any practical benefit about yield drag from a crop pushing into marginal acreage, so I'll assume that question was settled even though I can't recollect exactly how and with which result. I'm certain there is some genius out there at Informa or FCStone who's got all this figured out, and got the brilliant analysis cleared unvarnished through a bunch of dreadful corporate meetings.
The above questions are so hard as to be useless, its better to talk about that guy who got home from the Riverboat in Evansville and found he'd grown 250 bushels of corn on each acre. When I hear about those developments, I wonder if we're talking about the excess of 60% of the crop planted between May 12 and May 26. And the market has said, those crops are made, regardless of the fact that the Western Corn Belt fell way behind on precipitation in July, followed by entire disappearance of rain for the entire Corn Belt in August, with nothing of mention forthcoming. The drought rally hasn't held, all we need is a a slap on the buttock from the USDA September 12 report to bust the lows. We held a contest to determine the Ugliest of Them All, and the corn charts won over all those jpegs of tipped-back corn cobs and cracked earth (Garvo's mutant slime though, that was something else).
Fortunately, soon, we'll have combines a rollin' and mystery solved. Or maybe not. The dribble of yield news will go on for a record period of time. Even the Pope said, it will be harder than ever to report stocks with farmers cramming $4 corn into gleaming new storage facilities. Farmers will tell the truth to the USDA about their yields, because despite their libertarian principles and indignation over WASDE BS, they have a latent trust of the government, while the commercials who have no principles at all will overstate their inventories. So there may be some ambiguity ahead, but that's not all bad, it will allow the trade to defy fundamentals, and volatility makes certain people rich.
Some things at least are quite clear. The Brazilian real is at a record low off a record South American soybean crop, so demand won't be quite so sensitive about hit to US bean yield…Oh wait, scratch that, there's a massive rally in beans and I don't know what to say because noone's every explained that contradiction to me. And we know that US wheat is overvalued in the world market because we lose every snap tender, oh, wait again, inspections are foot-to-the-floor with a strong US dollar. If the bears lose, at least they can just spread the gonads out of beans on corn and beans on wheat, and make themselves look right.
Finally, can we just get rid of Indian wheat from gloabl supply and demand picture please? Their production is crapping in the punch bowl, as hedgefund farmer has been known to do. They won't sell, and certainly won't buy. Even if they did sell, Chinese pride won't allow purchase. Those bushels do not play.
Edited by LongKC 9/8/2013 02:57
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Ugliest of Them All
