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Why Were Corn Traders Just Crushed?
Corn (and soybeans) are plunging, limit down on CBOT following data from the August WASDE report. The USDA unexpectedly raised output estimates for corn stocks and production dramatically higher than expected. This in and of itself would send corn prices lower but the significance of the shift is likely exaggerated by the fact that satellite imagery had suggested signficantly worse crop conditions ahead. One wonders who will be right?
from WASDE:
- Corn end stocks: 1727MM, Exp. 1427MM, Last 1599MM
- Corn production: 13686MM, Exp. 13323MM, Last 13530MM
Which sent the prices limit down...
But, as Bloomnberg reports, daily infrared images of U.S. farmland captured by satellite indicate worsening conditions for this year’s U.S. corn crop, according to one data-analysis company.
Domestic corn production will be 13.34 billion bushels, Descartes Labs forecast. That’s down 6.4 percent from last year and also less than the 13.53 billion-bushel forecast by the U.S. Department of Agriculture last month.
National corn yields are seen at 164.9 bushels an acre, down from its 168-bushel forecast last month, the Los Alamos, New Mexico-based company said. That’s also lower than the USDA forecast of 166.8 bushels from last month.
Problems caused by excessive rain from Nebraska to Ohio in June and July are clearly seen on computer-generated maps, said Chief Technology Officer Steven Brumby.
“The numbers have moved, and more than normal this year,” Brumby said in an interview Friday. “The full effect of the wet weather has yet to make itself known. The yield is probably headed lower.’
A theoretical physicist, Brumby is a co-founder of the company, which started as a project at the Los Alamos National Laboratory in 2007. Descartes analyzes images showing farmland to a resolution of 1/5 of an acre (0.8 hectare).
‘‘We can see what’s happening to the crop without having to go out into the fields,” Brumby said. “We are using time, space and color to see plants change.”
Descartes isn’t alone in forecasting a smaller crop than the USDA. The average estimate of 31 analysts and trading firms in a Bloomberg survey last week was for 13.332 billion bushels.
* * *
For now the market believes USDA estimates...
Of course the initial reaction was all algo-driven...
Corn dropped 6% within a minute of the 12pm news. Other Grain futures: $ZC_F $ZS_F $ZW_S pic.twitter.com/zSY67SiCvV
— Eric Scott Hunsader (@nanexllc) August 12, 2015
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OH NO NOT CORN TRADERZ!
:)
I am sure there is someone making a MAF rant on youtube about this ring now.
short taco shells..
Perhaps China might be seen as buying less corn and soybeans...? US corn would be more expensive for them if the Yuan continues to go down vs. the US$.
Ethanol for fuel producers should be seeing less corn. But they won't. Because bureaucracy.
As someone who has farming family in the Midwest... This is huge! Prices for equipment & land are skyrocketing while Corn & Soybean prices are nose diving. Oil is in the tank so corn isn't used as much for ethanol. People aren't rotating crops anymore. There are going to be a lot of bankruptcies coming real soon.
It's just paper corn...faggedaboutit.
If the talk moves on to candy corn....then the shit is about to explode.
As someone who lives in the midwest, more specifically the tristate area of IA, MN and SD, I have two words.
FUCK ETHANOL
I filled up this morning with regular, no corn based 87. I paid 40 fucking cents a gallon more over the 87 with 10% corn. I don't give a shit.
I would rather go broke burning real gas. Yeah it sucks paying that much more, but then I notice I am not the only one every time I fill up.
I can tell you things are starting to slow down around here in corn country central. Equipment is not moving at nearly the pace dealers were selling it just two years ago. There are some very smart operators around here. I work part time in the fall and spring for a fellow that farms over 12,000 acres. He is the type that makes safe bets and never goes over his head. I know several that are living high on the hog right now, but very close to a crash and burn moment. One of them went broke back in the 80's, and still has not learned his lesson, difference being this time he has two sons tied up in his operation that stand to lose thier shirts as well.
This is not to say it's bad around here but there is something in the wind, and it's not just the smell of hogs and cattle.
I buy pure gas also. Ethanol attracts water which two years running killed my mower. I no longer have to worry about my shit not running, engine missing, and my mileage went up 10%
Here in Boise, I pay one nickel more per gallon for straight 87. That's it.
It's just paper corn...faggedaboutit.
If the talk moves on to candy corn....then the shit is about to explode.
China does not like to buy American biohazared corn it gets 80% of its corn from Ukarine and also GMO corn is band in 67 other countrys that is why the prices are so bad until the American farmer realises the market is crashing for GMO and no one wants it prices will get lower, the biggest growing business in america last year was organic, now farmers are puting even more Roundup on there crops to kill wheat ,barley etal off so it is really toxic now , it went from 300 ppm in 2012 th 6000ppm this year of alowable glyphosate
Not to mention that some weeds, such as pigweed are prone to developing a glyphosate resistance. Monsanto will have to develop another herbicide in time to keep their business model running.
There's a field near me that only gets planted after threat of flooding has passed, if it is still early enough in the year to get a crop of beans in. The only thing that grows in it otherwise is pigweed and mustard.
Well thanks for the education. Never heard of pigweed before, but after seeing the pictures I recognized it. It turns out tht the variety that gorws down here in Florida is already round-up resistant.
So if you are keeping track, in Natures war against GMO, Nature is up by 1 again.
I am sure those cocksuckers at Monsanto didn't count on resistance happening so fast. This GMO shit has to stop.
Pigweed is a variety of amaranth. Why not explore changing to a marketable variety of amaranth since you have land where it is well-suited? You can buy some from the bulk section at Whole Foods or order it online. It's gluten-free. I've cooked with it a bit.
Here's a somewhat dated info sheet from Mercola.
http://foodfacts.mercola.com/amaranth.html
Harvesting could be a challenge. Don't know.
I'm still a farm boy at heart and I read the farm reports from around the country and the farmers themselves say the harvest this year is going to suck. It sounds like some bozo in DC who has never even seen a corn field has run iffy numbers through a magic model and decided everything is wonderful. There HAS to be something in the water there, LSD perhaps.....
I don't know shit about farming (my paternal line was oil/gas), but if you have some links I could be curious to see what farm reports read like.
Regards,
Cooter
From the way the corn fields in Michigan look, they are going to have a bumper crop.
Bumper crop? Hows that?
Lotsa fat coons and turkeys and not a mexican in sight?...sheit...thats just a normal Michigan december..
big problem in Mich this year is, without any Mexicans, whos gonna pick all these damn apples?
What has been planted in North Dakota is going to be very good , but after the bad prices last year they mostly planted soy beans.
Wheat is down a bunch today as well.
What's been planted around where I live in Northern CA is doin' jes fine, thankee...though there are a few spot problems with water, and a couple of big fires have taken out enough crop to maybe effect the prices in the Bay Area in a couple of months.
I'm in North Central Kansas..........dryland corn and beans are looking great as we have had a wet July and August. But Farmers growing GMO corn are going to get killed with the price. Monsanto seed is $150 per acre. Fertilizer cost= $200/acre Herbicide cost $25/acre Water = $25/acre Equipment/Labor = $100/acre current corn price today = $3.12
Let see.......160 bu avg on irrigated land x $3.12 = $499.20/acre gross - Input costs ($500) = -.80 cents
And that is before property taxes and income tax........
Whohoo.........feel like a banker! Where's my Lamborghini?
Sounds like the nice folks at the BLS are helping out at the USDA.
I heard it suggested that yields were not as good as reported last year. Someone said that you could get a better idea if you factor in the crop insurance pay-outs.
I'm a gardener, not a farmer. Don't know squat about this.
So a Private Forecast vs a Goverment Forecast. I wonder if the USDA has been studying under the BLS?
Assume that government forecasts are only accurate during the best of times and you won't be disappointed. Always predicting record crops? That's going to make you look like a genius when farming is expanding. But we're already using something like 50% of our land for agriculture in one way or another, and agricultural land is shrinking due to housing developments. Throw in something like uncooperative weather, and optimistic government projections are going to make them look like idiots. They'll get a good year or two in now and then, but they're on the long slide down.
We have well more than 50% of our land available for farming if need be, just look at how much is locked up in Federal Lands within the newer States. The biggest danger is the fact that the use of Monsanto Round up and artificial fertilizers and pesticides have destroyed the micro environments of the soil. Tiling the soil also wreaks havoc on the soil structure but is not nearly as bad as the Monsanto garbage. Tilling destroys the root structures of the dead plants, those structures provide a great environment for the microbes to work. The microbes are essential for maintaining the soil. So you can produce very well for a few seasons but then the land is shot for years until the microbes regenerate. Preparing new acreage is not a fast process either. So we got the land, we have identified what not to do but we still are looking at trouble in the short term. Lets not forget also that if you have 3 forty foot by four foot raised beds you can grow more food then what you will know what to do with in a sustainable way. Plant a 4 "dwarf" fruit trees and a couple of pig-me goats and some hens and you are just about self sustaining. 1/3 of an acre is more than enough to just about completely feed your family in a life or death situation. One bonus is that you know what you are eating.
A lot of that federal land is still used for agriculture. Ranching. BLM and National Forest lands are often populated by cattle. And a lot of that land is not suitable for high yield farming.
Don't forget the limitations of water - good old water.
And by the way, if you google underground aqauifers map, you find that ALL the USGS slash water stuff seems to be 'unavailable' at this time.
WTF?
Zero data on aquifers, stream flow, NOTHING.
Anybody have anything on this? It is a real WTF moment for me this morning...
The only goat meat that I ever liked was served in a Manhattan Indian restaurant. Mexican goat meat sucks, it's fatty and terrible.
What you need are two young Berkshire pigs around 8 weeks old. Problem is, no fun having them on such a tiny piece of land. I raised them on 7 acres of pasture and oak trees, lots of acorns. That is the best pork, money can buy. I raise them up to 275 lbs, sell one and feast on the other.
I should of specified the goats were for milk production. There is a Jamacian joint on 111 in Islip NY that makes some killer Curry Goat. That pork sound awesome.
Unfortunately the corn "traderz" will make out better than the actual farmers on this action.
Farmers were already basically underwater on this years crop due to land prices input costs ect... So, this is not good for normal people outside of the financial world.
I'd look again...this is way more than corn n soy..Looks like a POMO day and it's all about knowing when and what to buy to enjoy the ride (looks like those Duke's have cornered the "market" again)...
Sugar, wheat, coffee, cocoa, rough rice etc. etc. all simultaneously getting roughed up...
Exactly same timing as equities surge along with Cotton, OJ. lumber...even the Treasury curve rolled over on this "crop report"...wtf.
One wonders who 'zactly owns dat WASDE report thangy...
Chinese hackers infiltrated USA Satellite Downlink station?
Because they are corny! Go long corn dogs.
Where the hell is Beeks!?
Thank you. Was waiting for a Trading Places reference.
Love it. I always make these jokes when the "crop" report comes out but now I am in South Africa and the traders don't get it...
Yeah,.. but you forgot the valuable crop known in some parts as 'soybean'-- this my friend is a 'Cash Crop'!
All the noise in China about 'Pork Prices'... just wait til no-inflation in US Beef Prices hits the shelfs and the price of cooking oil for your french fries...[?]
Please use peanut oil for my french fries.
But about those little piggies...
http://www.ibtimes.com/bacon-prices-all-time-high-shortage-or-dreaded-ba...
The Sell off inevrything begins.
I gotta feeling corn might pop from here.....
You gotta read this one twice to fully appreciate it!
snuck that fucker in like a midnight coon in a corn crib you goddamn genius Orville Reddenbacher posting mutherfucker!! Brilliant!
somebody is getting corzined big time
good. so a "family size" 10oz bag of doritos wont cost $4.99 anymore?
It will still cost $4.99 but it will be only 8oz.
The reduction in size isn't for cost savings, it's to promote good health.
And the 8 ounce size will come in exactly the same bag as they used for the 10 ounce.
Well, you know, they already had all those bags made.
shit! once the chinese buy their percentage of our crops [hedged], esp, corn/soybean-- with Frito-Lays moving it's entire operation to China for good [measure], you'll be able to buy the same bag for 'Twenty-Five-Yuan/US$'.
U go USSA
So someone could make alot of money?
Not just "someone," the right people.
The satellite analysis is correct. This is year 2 into the 10 years preceding the solar shutdown (maunder minimum). Within 8 years mass famines will be world-wide and it is going to be colder than a witches tit 20 to 80 years after that. Futures markets are where it is going to be at. Better learn them now if you don't already know how to play them.
You're predicting world-wide famine and severe cold weather and your advice is to learn to play futures??? Sounds like you just like talking out of your ass on the internet.
The majority of fucking GMO is corn and soybean so I hope their stocks drop to the utter depths of hell....I wont buy anyhting with soybean in it and I only buy my corn locally after verifying it was not GMO.......
Off topic but this is important to me: 1. I know about state gas taxes....2. I know lower crude oil prices take time to trickle down to the gas stations... But in my opnion, somebody is making a ton of money because I am not seeing the prices for gas and a quart of oil going down much,... thats all, but maybe we should all be loudly complaining about this topic of gas prices and a quart of oil...ths
.
complain to who? the politicians who are paid hansomely by them? The presstitues (lol)? The sheeple..haha
lol...I know what u r saying, and no not to politicians. I think zerohedge is a great place to do it tho. There are many around here that have more time and resources to prove my theory. It just needs to be brought out in the open. If zerohedge was to look into it and make it a headline that would help. As a few mentioned, zerohedge is becoming very recognized. I even heard Jim WIllie give zerohedge major kudos. Our shouts in this comment section could possibly make a difference.
Nothing to see here. Just the system releasing mixed data so that TPTB can pick the pockets of other market participants.
Still, having hot stinky sex at night out in a mature cornfield is a worthwhile endeavor! Especially if you are not alone...a guy can dream right?
That 'Perseid Meteor Shower' routine has not worked worth a damned...girls now a days have no interest in astronomy, only astrology...and who wants to fuck in a cornfield anyway? some sort of farmer?..
Nobody will see you,but you'd be heard with all those ears listening.
Maybe this fella has sumpin to do with it...
Whacking the nads of MonSatan?
Gartman was long this market. Next question please.
From Iowa we are going to have a record year....WTH
Corn yield around here is hit and miss. Well drained areas are fine, but otherwise fields are ruined for the year.
I watched a hay baler get stuck up to the axles on a hillside last week. Can't say that I've ever seen that before.
We've had a wetter than average year here too. But I live in a place that averages 9" of precipitation per year, so that's not saying much. We've already hit 9" this year.
Are you describing farming or sex here?
Maybe the fact that 88% of the corn crop and 94% of the soybean crop in the U.S. is GMO - or in laymans terms, "carcinogenic" - has something to do with the price drop.
phys.org/news/2013-06-gmo-corn-soybeans-dominate.html
see my embed above.
there's a guy that's got corn that supposedly will not xpollinate with GMO.
The increaeed effeciency of GMOs have increased the supply of corn driving the price down. I have been told that GMOs are going to feed the world including people who have no money. GMOs are so effecient that they will drive the price of corn to 0. This is how it is supposed to work right? /sarc
who released the satellite imagery?
They found it on Hillary's email.
From the Delmarva Peninsula, we have had unreal rainfall, but with sandy soil the crops are thriving. Another banner year for yields in the making.
Why? Because the trend is still down, lol.
Not sure why Tyler has his panties in a wad. This is what markes do ... always have done. They can go limit up, and they can go limit down. Seems that every time we have a major price move, there is some conspiracy theory. Read some of the traders of 75 years ago. Price has very little to do with fundamentals except in the long term. Short term prices are driven by technicals and emotion - it has been like that since the earth was flat.
Fewer Jackasses More Corn
Now wait a corn picken minute. I see lower yield in Missouri Kansas, Oklahoma. Do they have corn? Yes. Do they have as much as Iowa which appears to be increasing production? No. I know, unless you are raising hay in the midwest, it has been a pretty lousy growing season, but . . .
We all know the economy is in the crapper so folks are not buying as much of that corn infused gasoline (don't forget, ethanol has a much longer shelf life than gasoline). We also know that since California can't get any damn H2O, they are slaughtering beef cattle like crazy (the only thing that has kept beef prices from getting even more ridiculous). While feeding the cattle out too soon would create more corn demand now, what happens down the road when you've diminished the heard size (as in futures). The Mexicans have a saying "fewer donkeys more corn" and that applies to cows too as there is no shortage of jackasses at the USDA. However it is entirerly possible that this one has been called correctly. Confucius say "even broken clock right twice a day."
I have not seen any bargain prices on beef, but it might be because I only eat grass fed.
Not touching beef raised on FrankerCorn
That's right you have not, the price of beef has skyrocketed, I just wonder what would have happened if they weren't slaughtering extra so they don't have to water them.
http://cnsnews.com/sites/default/files/images/Updated%20Beef%20Chart%20%282%29.jpg
The mighty Conrnholio needs TP for his bung hole.
HFT induced GMO corn trading. Bon appetit!
What's up.. Looks like 1986 all over again. This market can tank 5 days limit down EZ I got school back then and the ground in centeral Illinois was cracking up to 3 feet down, but most of the crop was made, like now. ADM and the likes do the 'big play' this time of year, if they can. The big farmers have insurance (Gov backed).