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Corn Plummets On USDA Report
Corn traders, especially of a bullish persuasion, are being carted off trading floors feet first after a report by the USDA crushed expectations that there is a supply shortage. Reuters reports: "Corn futures plummeted more than 10 percent in early trading on Thursday after a U.S. government report said farmers were able to seed far more corn acres this spring than many analysts expected and that supplies are not as tight as many thought." And while the front month dropped by the maximum allowed limit, that did not stop the July contract, which has entered the delivery period and is trading without limits, to plunge by a whopping 70 cents. "The declines leave corn with the biggest monthly fall since June 2009." This is one time when those listening to Goldman would have been a well-advised action. From Damien Courvalin's note released yesterday: "We expect corn and cotton acreage will be higher than projected by the June WASDE, to the detriment of soybeans."
The carnage charted:
From Reuters:
Despite excessively wet conditions, a scramble to get corn seeded in key growing areas that was fueled by high prices has set the stage for a potentially record-large corn crop, and conversely a smaller soybean crop, according to the report issued Thursday by the U.S. Department of Agriculture.
"There are some big surprises in this report," said Karl Setzer, commodity Trading Advisor for MaxYield Cooperative in West Bend, Iowa. "All in all, what this shows us in the quarterly stocks report, we are not using grain at the pace we thought we were."
USDA said farmers planted 92.282 million acres with corn this spring, above an average trade estimate for 90.767 million acres and well above the USDA's June 10 forecast of 90.700 million acres.
The department estimated quarterly corn stocks as of June 1 at 3.670 billion bushels, above an average trade estimate for 3.302 billion and compared with 4.310 billion a year ago.
Traders said the fact that farmers were able to get so much corn in the ground despite flooding and heavy rainfall through the U.S. Midwest underscored how recent high prices pushed farmers to plant corn over soybeans despite the adverse conditions.
"Getting this much acreage planted is a surprise," said Shawn McCambridge, an analyst with Prudential Bache Commodities.
That said, this move is likely a buying opportunity. Back to the mentioned Goldman report:
Adverse weather has significantly hindered US planting this spring
Adverse weather conditions impaired US crop planting this spring and we expect corn acreage to be lower than March intentions although higher than projected in the June WASDE given the strong returns offered by new crop prices. We also expect cotton acreage to be higher than intentions and believe that higher corn and cotton acreage will result in lower soybean acreage; we note that the USDA has shown a bias in overestimating soybean acreage by 0.3 million acres on average in its June estimate. Tomorrow’s acreage estimates will likely be revised in August as the USDA conducted its June survey with some planting still to occur and the impact of the Missouri River flooding still unknown. Finally, although weather from July to September is essential to determining production, we believe that this spring’s delayed planting, poor weather and flooding will also limit production potential as it translates into higher abandonment and lower yields. See Hit to acreage, abandonment, yield lowers US production outlook, June 13, 2011, and the updated table below for our expectations.
Uncertainty on feed demand and grain stocks remains high
Grain stocks have often generated large surprises and markets will be very sensitive this year given critically low inventory. Consensus expects lower stocks vs. last year for corn and wheat and higher for soybeans. We believe that low corn stocks would require sharply higher prices as the recent selloff likely boosted demand for feed, exports and ethanol production.
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Corn holed! Bitchez
Thank the gods, I was wondering where we'd get all our high fructose corn syrup.
Back to the TeeVee.
I am Chumbawamba.
But how much of this corn will succumb to mold due to the wet conditions?
A kernal planted is not the same as an ear harvested.
http://www.grantpeeples.com/?page_id=529
Beeks! Where the Hell is Beeks?
LMAO
Corn: It's Silver you can eat or burn in your car.
Welcome to the wonderful world of manipulation; Corn Bugs.
Now comes a BIG QE3.
There are no ways around, i.e., a terrible deflation is all over. Real estate, food (corn, wheat, soybean, etc.,), and PM prices all plummeted.
Now, Bernanke can monetize the entire US debt without any limitations. WOW!
Few bogus numbers from the US government, and bingo, the FED got a home-run.
Corn Flakes
El CornHolios - now they need some TP for their bunghole.
Clarence BEEEEEEEEKS you gave us the wrong crop report, turn those machines back onnnnnnnnn!!!
lol +1 Winthrop.
ot - did anyone notice that jamie dimon quietly sold his jpm shares back in january? They loudly proclaimed when he bought $15M at $25 but nothing about him selling.
With most corn being GMO these days, who in their right mind is eating it anyway? I avoid corn based foods as if it were poison.
Makes you wonder...is there a brent crude-wti spread on Monsanto corn vs. the real thing?
It is poison.
Not to fear, the radionucleides from Fukushima will genetically scramble the GMO corn to make something fantastic! Add two negatives to get a positive!
Do you mean the corn bubble finally popped?
http://www.flickr.com/photos/wafflewhiffer/224222076/
Right as Uncle Sugar is turning off the ethanol subsidies.
Isn't it just wonderful how DC distorts markets, first one way, then the other?
"Uncle Sugar"? Sounds like a very icky man...
'Biggest price decline since 2009'....am I missing something here or is the price back to where it was....2 days ago?
Looks to me like its the biggest price decline....since the matching decline a few days ago on Jun 24 2011.
Get those traders back in here! Turn those machines back on!
THIS is how QE3 will go down....various bubbles bursting in equities and commodities, all shorted ahead of time by PD's of course, proceeds go to support bonds.
Brilliant.
Oh dear, since when did physical quantities matter to the electronic and paper trades around the globe? Oh yeah since QE2 ended....
buy the planting season, sell the harvest. an old speculator trick.
yep, that trade works almost every year when spread against wheat. But is super volatile
It's kinda silly. it doesn't matter what you seed, and with the flooding and weather it's what you can harvest. maybe a good buy signal. add to that other extreme weather events, and I may take a look at this space now.
Yea 'acreage planted' in soon to be flooded farmland is counting your eggs before the hens are hatched.
USDA counts underwater acres as planted
www.barchart.com/headlines/story.php?id=1459406
that is just too funny.
This smells bad, and I doubt prices stay down very long.
"Five of South America’s major fruit-producing countries have witnessed an historic cold snap over the last week, including a snowstorm in the Argentine citrus region of Tucumán. Low temperatures were registered in Brazil, Uruguay, Argentina, Chile, Peru and Bolivia. The blizzard hit Tucumán on Friday in conditions not seen since 1920, while the Brazilian state of Santa Caterina recorded a wind chill of -25°C (-13°F). It will take time before the full consequences for crops can be seen across the continent, but Brazilian press reported Santa Caterina’s agriculture and livestock were seriously affected and 80 people have died."
http://hisz.rsoe.hu/alertmap/woalert_read.php?edis=CW-20110629-31346-MLC
OT but hillarious, anyone catch the MSNBC reporter this morning who thought his mic was off and called Obama a dick? :D
If you find it on YouTube then post it. LOL!
I will, lookin right now.
http://www.youtube.com/watch?v=VH0tg2zRz4o
Nice catch, I couldnt find it.
Exactly why would one not view this development through the same scope as the IEA release?
I have 10 000 corn warrants that are basically worthless now... Bought at 1 krona, now they are down to 0,18. Such is life and such is trading...
I was hoping for some bad weather, Ben is always talking about the weather pushing up different assets, but no luck...
You can not escape the almighty Bung Hole, El Cornholio.
http://www.youtube.com/watch?v=N7MMTwIlWlU
President of Exchange: [Randolph Duke has just collapsed with shock] Mortimer, your brother is not well. We better call an ambulance.
Mortimer Duke: Fuck him! Now, you listen to me! I want trading reopened right now. Get those brokers back in here! Turn those machines back on!
[shouts - it echoes pathetically throughout the trading hall]
Mortimer Duke: Turn those machines back on!
*****
Randolph Duke: [being wheeled out on a stretcher] Where's Beeks? Where in the hell is Beeks?
Billy Ray Valentine: [to Winthrope] Yeah, I forgot about that guy.
To scene with Beeks in a gorilla suit getting kornholed by a real gorilla.
They should hold onto those positions, the radiation releases will shrink the available crop in no time!
seems around these parts in the so called corn belt of the republic, I am surrounded by bean fields not the usual corn fields. It was way too wet and nasty early to get the corn planted, so the farmer planted beans. It's another market ruse, my take is dump the beans, buy all the corn you can stuff into a elevator and wait for harvest, you will then see what the scarecrow sees.
"The crops always go in. The crops always come out."
so many people play the long soy short corn game
can't trust USDA much
BTW, kinda late for corn planting isnt it? Last week in June? Or am I missing something here from an event that normally takes place 2 months ago but only reported on 2 months later....what is this the early 1900's?
Wow, what a fucking beating! But I'll be looking to buy the Nov beans at around 12.75. Its going to be a very hot and very dry late summer.
SOLD! I'll take the other side of that trade all day long... how much do you want?
Dry....well dont forget the impending massive floods Turd.
The floods have no impact on central IA and IL.
I can't help but wonder if some of those seeds have been washed away of late?
The USDA has a history of lying. What do private forecasters say?
"The Money Game" by "Adam Smith", published around 1967, contains a chapter entitled "Timing, and a diversion: The Cocoa Game" (recommended for all commodity traders). Le plus ca change, le plus c'est la meme chose.
Corn is limit down this morning, and cotton is teetering on the limit also. Not just corn and cotton, either. Beans, oats, and wheat plunged also. Wheat is near its limit down also. The market has been pricing in very tight supplies because of the late planting. Now, if we can just have a long, indian summer to ensure a good harvest. My bird friends would be very grateful this winter. So would my wallet!
Or disaster from obvious huge floods coming this summer. Duh.
Randolph and Mortimer must have gotten killed on that one.
Turn it into biodiesel!
Don't these guys ever check the facts by putting somebody on a plane and visit the corn fields?
On the other hand, I've seen so many fields here in Europe where they just plow the fields because the plants are to small and havesting would cost more than the returns.
I don't know how it is in the US.
Do actual due diligence? Bah!
I live in those midwest farm communities. This has been obvious for a month and a half. All the fields were coming up corn - no one planted soy. So, the next derivative trade (after closing out the corn short) is look for the uptrend in soy...I mean NO ONE has planted soy by me...
Your area is not representative of the overall planted acres. Lots of acres switched to beans from corn this year... wait and see.
Mayhap yes, mayhap no. I'm waiting as is until I get my signal, but I'll keep my stops tight. The one thing I will guarantee you is I will lose an ass-load less than I made on my short corn.
Happy trading...
Hilarious.
How many times have we heard all kinds of shreiking about famine and food shortages?
Looks like there is plenty of food as of today.
Sarc:
Zenga (Farmville) is going to have a 20 Billion IPO. According to CNBC it is most highly anticipated IPO right now
Invest in FarmVille crop stock Robo....about as worthless as this stupid planted corn report. Means nothing.
Oh and I see Robo made it thru to junk all my posts before he makes a post as usual.
Some of those are mine. After 50+ posts in just 4 threads I gave up caring what you said.
Agri business has no loss years - just get it planted:
Crop insurance IS the bail-out. Risk off.
How now will they explain away food inflation?
What about the battle against GMO corn and patent infringement ?
Monsanto always wins.
This all assumes a good harvest, of course. Because of the late planting, an early fall would quickly reverse all the Cumbaya joy and laughter. We need to also keep in mind that grains are still substantially higher in prices than they were one year ago.
Corn on June 30 2010 was priced at $3.45/bushel. Today, even after the limit down move this morning, corn is still priced at $6.20 for the December contract. That's a 74% increase from the end of last June. That's hardly deflationary. It's not even DISinflationary! That's INflationary, any way we look at it!
Exactly. Inflationary because of Ctrl. P; not bad weather, low yields, ethanol subsidies (well maby some of that), or higer demand due to "more sophisticated diets" (or whatever that rediculous term was).
I entered a DEC Corn call spread about a month ago. Sold it today for a 40% loss. Oh well. Such is options trading.
I live in those corn fields. This has been obvious since the corn sprouted a month and a half ago. No soy this year, all corn...
It's clear to me you don't live in the Dakotas, or Minnesota, or any of the gulf states near the Miss. Delta. or Southern Il, or Missouri.
USDA has announced a resurvey of four states: MN, ND, SD and MT. If it determines that revisions are necessary (and they will be; look for a 6 mil acre decrease out of the dakotas) the new figures will be released on Aug 11, 2011
http://www.nass.usda.gov/Newsroom/Notices/06_30_2011.asp
So I guess that means "power into real estate boyz and girlz," right? Yeahhh, right. We're in a depression in Real Estate and the more DC and The Street try and "get that supply off line" the more they're missing one the great equity recoveries of all time. And of course is there any doubt about the end of QE2 now? "Trust in Cramer." At least provided the entire CNBC network doesn't gang up on his "i've been right since prior to the Great Crisis" cuz he was the only one screaming about it coming on any network prior to.
I farm.
Corn planted in wet fields = poor stands, like mine this year.
More complete and utter BS from the propaganda ministers, the markets behaved as the masters expected. No facts need to be accurate.
There must be no inflation between now and Nov 2012, it will not be allowed.
take a look at dba, the chart looks ugly, but there are clear good points to put a stop loss. not a bad trade to make
Well, in my tiny corner of southwestern lower Michigan/northern Indiana, fields that have always been planted in corn are in soybeans this year. The corn that has been planted, however, is looking very good - tall, thick and green. Definitely more than "knee high by the 4th of July."
USDA? bwahhahahahahahhaa... oh stop... having to work with those bozos I can say the top guys are all pushovers for the powerful politicos and the bottom guys spend all their time working for brownie points. The health of the US agriculture industry is a significantly lower priority.
Thanks for the weather report. Corn now has a nice entry point, since the spring planting season in 2012 is virtually guaranteed to be awful. As Rodney Dangerfield famously said, in the immortal movie "Caddyshack", If everybody's selling, BUY, BUY,BUY!
"Getting this much acreage planted is a surprise," said Shawn McCambridge, an analyst with Prudential Bache Commodities.
It's not a surprise at all. It's a goddamn lie. You are a lying motherfucker. Fuck planting. There's no goddamn yeild. Texas is fucked new mexico is fucked. All around the flooded ass mississipi is fucked.
Note from Europe: driest drought for 80 years in Germany, 100 years in France, UK 60 years. Barley in UK a no-go, hay/straw hitting +200% 2010 prices.
On the ground, prices have already hit a large over-drive.
But... sure. Nothing to see here folks.
[edit - not to mention that Georgia is looking at farming apocalypse with their "get rid of the illegals" turning into "oh shit, all our crops ain't getting picked this year". Google it, read the stats - all rotting in fields as we speak. Do your due diligence, and stop putting faith into excel spreadsheets... at some point, reality > data.]
weather modification. another search engine task.
http://pesn.com/2005/09/06/9600160_Weather_Modification/
You can be sure that CHINA is loading the boat with cheap corn thanks to the USDA.
beans beans and more beans is mostly what is planted as a fall back crop around my
section, it was just to darn cold and wet this spring for the usual knee high corn by the 4th,
Jack would be proud.