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If the boat starts leaning anymore, I'm going to spill my beer. So, let's look at some positives...
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WItitan2
Posted 6/27/2020 08:17 (#8338725)
Subject: If the boat starts leaning anymore, I'm going to spill my beer. So, let's look at some positives...


Pierce county WI
So, there was some pretty good fundamental demand news this week. Ethanol production and the draw down in stocks jumped pretty aggressively this week. The week before ethanol was up and stocks were down, but at a much lower rate. https://www.dtnpf.com/agriculture/web/ag/news/business-inputs/articl...
Second, there was a quarterly hogs and pigs report. Hog inventory is 105-106% of a year ago! https://www.nationalhogfarmer.com/marketing/us-hog-inventory-5 Now add in the cattle inventory from the cattle on feed report being the second highest ever, and there's a lot of domestic mouths to eat corn. As much as everyone is worried about ethanol, and China, feed use is still #1 when it comes to using us corn. Just because ethanol and distillers production is down, some of that is going to be offset by feeding more corn and soy meal.
Now, will there be an adjustment in 2019 production? Did they ever resurvey? The river terminal was telling me that they have been averaging about 52# test weight on the corn coming in. The northern corn belt last year had a lower weight. Maybe not 52#, but maybe 55 instead of 58? There was also issues with storing last year's crop. At some point, this has to be accounted for.
Then there's the weather. Most of the corn belt is waist high and smaller corn. There's still a lot of growing season to determine yield. With the warm weather we've had in June, what kind of temps could we see during pollinating and grain fill?
So, I'm not saying we're going to $7!!!!!!, no, but I don't know that we have as much risk to the downside. Basis has been screaming for a year now, that the market wants your corn. * The exception would be in the ethanol market areas. Our river basis has been good for a year. So, while everyone talks about this "massive" carryout, that carryout is the potential 2020 crop. The 2019 crop isn't going to have that much left. There's lots of production questions that need to be answered, weather, planted acres, replanted acres, prevent planted acres, ECT. I just can't help but think that when everyone was so bulled up last year, and got beaten like red headed stepchildren, that maybe now that everyone is so bearish, it's time to get a spanking? https://youtu.be/0atATbXbQ9g
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