UPDATE: Effectively Out Of Corn (Soon Soybeans)?

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Nichoman's picture
Nichoman
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UPDATE: Effectively Out Of Corn (Soon Soybeans)?

A couple of sources, plus the questionable new USDA crop report here and here are on track to confirm the concerns in the thread I posted on August 8th...titled HEADS UP: Watch Grain prices next 8 weeks.

Here's just a few key points...

First Corn...

  1. USDA has lowered corn yields to 162.5 bushels/acre.  Data so far suggest the actual yields could be in the 158-160 bu/acre range.
  2. Corn stocks are at the 3rd lowest levels in 35 years and demand is high.
  3. There is evidence (per analysis of multiple sources) if the yield is at or below 160 bushels per acre.  The system effectively will be out of corn for a few/several weeks.
  4. This is confirmed as corn is now touching $5 and futures contract prices (and recent price changes) are suggesting this risk is real. Any additional price rise...suggested above an additional 10 to 20 cents would support this risk as increasingly likely.
  5. Trend of corn demand and realistic yields indicate 2011 will be even worse (shortages).  
  6. Watch price changes/swings the next 4-6 weeks on the magnitude of perceived impacts on this risk.

Now Soybeans...

  1. Demand continues to rise at or above expectations.
  2. Soybeans yields are forecast to be at record of 44+ bu/acre...harvests are starting to come the past few days...we will know in the next 2-3 weeks.
  3. If yields are as predicted...we should be OK w/r/t supply for at least the next several months.
  4. If demand increases continue as suggested....hard to not see having problems with supply and spotty shortages in 2011.

Just look at the prices changes and curves for corn and to a lesser extent...soybeans.

Put it this way...none of our family and local successful farmers in my area are planning on selling 2011 crops.

That's may take...there is nothing that deters me from my earlier comments w/r/t food in the HEADS UP post.   Not as pessimistic as Market Skeptic...but we remain headed for trouble from my data sources and experiences. 

2 cents...

Nichoman

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MarkM
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Re: UPDATE: Effectively Out Of Corn (Soon Soybeans)?
Nichoman wrote:

Put it this way...none of our family and local successful farmers in my area are planning on selling 2011 crops.

 

Nichoman

Nichoman,

I am assuming you will not be selling crops to take advantage of future price increases?  I had never really considered producers doing that, but it makes perfect sense. If that mindset takes hold, it could be a wild ride.

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LogansRun
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Re: UPDATE: Effectively Out Of Corn (Soon Soybeans)?

Great update!  Thank You!

yobob1's picture
yobob1
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Re: UPDATE: Effectively Out Of Corn (Soon Soybeans)?

Corn, acres planted, harvest and total bushels produced for the last 6 yr years in chart form.

http://www.nass.usda.gov/Statistics_by_Subject/result.php?BC0FFA44-2002-...

Same thing for soybeans

http://www.nass.usda.gov/Statistics_by_Subject/result.php?BB03432E-CC34-...

It would be interesting to watch farmers not sell crops and have no income for the year.  Might raise an eyebrow or two down at the bank.  Surprised

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yobob1
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Re: UPDATE: Effectively Out Of Corn (Soon Soybeans)?

Looking forward a decade or 3, the climate doom (aka Gerbil Warming eggspurts) folks may well have everyone looking the wrong direction.  Call me foolish, but the facts strongly suggest that good old Mr. Sun is the primary determinant of "climate" as opposed to shorter term vagaries of "weather".  If any of you have followed the solar cycles, you know that cycle 23 that just ended extended further than just about all of the cycles - except for the one immediately preceding the Maunder Minimum.  While its far too early to tell the whole tale, its safe to say cycle 24 is off to a rather inauspicious start.  Were the planet to experience something similar to the Maunder Minimum, growing seasons for many of the areas North of the 45th parallel might prove sufficiently shortened to render those areas non-producers.

The Maunder Minimum led to crop failure, famine and the expected increase in disease due to malnutrition.

Nichoman's picture
Nichoman
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Posts: 422
Re: UPDATE: Effectively Out Of Corn (Soon Soybeans)?

yobob1...

As an Atmospheric Scientist who has spent many years in the Climate Change arena, I've made my points long ago in the Climate Change thread.

I don't comment anymore w/r/t Climate Change...because its pointless.   If your interested...you can search the Climate Change thread on my thoughts. 

I will (re)state this...

  1. In science, their is no side...just facts and truth...no controversy because opinion is not relevant.
  2. If the basic laws of Dynamics, Thermodynamics, Quantum Physics and General/Special Relativity apply, then their is no controversy.
  3. If there is controversy...is it special interests (on both sides...remember, science has no side)?   Incompetence?   Both?
  4. Does the Government(s) serve the people...or itself?
  5. Is there much more going on than just the known energy/forces/interaction of the Sun?   Solar System?  Galaxy?  
  6. Are we in the incipient stages of understanding our planet?  Universe?

FYI...I've worked in high levels of government programs in two areas 1.)  Advanced Weapon Systems; 2.)  Climate Change.   Hence point 4 question above.

Also, your showing USDA production data in your earlier post...that is half the issue.  As someone whose family is in farming, plus, my background, I know full well how government "works".  There is reason to question some of the data...leave it at that.  Then the increasing demand side must be considered.

Hope that helps, 

 

Nichoman

Atmospheric Scientist, Long-Time Government Employee

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yobob1
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Re: UPDATE: Effectively Out Of Corn (Soon Soybeans)?
Nichoman wrote:

yobob1...

As an Atmospheric Scientist who has spent many years in the Climate Change arena, I've made my points long ago in the Climate Change thread.

I don't comment anymore w/r/t Climate Change...because its pointless.   If your interested...you can search the Climate Change thread on my thoughts. 

I will (re)state this...

  1. In science, their is no side...just facts and truth...no controversy because opinion is not relevant.
  2. If the basic laws of Dynamics, Thermodynamics, Quantum Physics and General/Special Relativity apply, then their is no controversy.
  3. If there is controversy...is it special interests (on both sides...remember, science has no side)?   Incompetence?   Both?
  4. Does the Government(s) serve the people...or itself?
  5. Is there much more going on than just the known energy/forces/interaction of the Sun?   Solar System?  Galaxy?  
  6. Are we in the incipient stages of understanding our planet?  Universe?

FYI...I've worked in high levels of government programs in two areas 1.)  Advanced Weapon Systems; 2.)  Climate Change.   Hence point 4 question above.

Also, your showing USDA production data in your earlier post...that is half the issue.  As someone whose family is in farming, plus, my background, I know full well how government "works".  There is reason to question some of the data...leave it at that.  Then the increasing demand side must be considered.

Hope that helps, 

 

Nichoman

Atmospheric Scientist, Long-Time Government Employee

I only intended to add to "facts" and "truths", not to step on any toes.  I do know a bit about farming having lived my entire life around and dealing with farmers and ranchers - so its not as if I'm sitting in some walk up cold water flat in NYC.  I also know a bit about the the USDA's hits and misses.  My observation is that they miss to the downside much more often.

I hearken back to the great rice crisis a few years back.  It sure cleared the shelves of some high priced rice in a big hurry.  Of course now you can get all the rice you want at a much lower price and a whole lot of people probably have 25 pound bags of rice (that they never purchased before) sitting and rotting.

My dad worked at ARCO during the days of the embargo gas lines in the early 1970s.  As it turns out there really never was a shortage of product so much as there was a transfer of product.  The "scare" had people "storing" fuel in their cars by keeping their tanks fuller.  It doesn't take too many people carrying a few extra gallons to absorb the product normally stored in the bulk tanks at terminals. Of course in time the system came back into balance.

I do find that "facts" are not immutable while truth is.  Sadly man knows few truths particularly as it relates to our planet.  We simply have no depth of knowledge compared to the age of the planet.

Full Moon's picture
Full Moon
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Posts: 1258
Re: UPDATE: Effectively Out Of Corn (Soon Soybeans)?

  What ever the argument you have going here on corn  the fact for  OUR area are ....corn is not  yielding the best here.   Waiting and waiting for it to get dry  and many  farmers will hold on to it . 

  So  who ever controls these things will do as they please .

 Corn oil , fructose corn syrup ( second ingredients in everything ), beef , pork , eggs,chicken   etc.  could  all be  effected .

 

  If at all possible get to know your local farmer .  Cut out the middle men .      I am going to study third world countries and see what we need to be doing to diversify to  feed ourselves  and the locals .

 FM

 Good luck to ALL 

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