Feed grain price prospects

[farming101]

North Dakota cash corn prices offered are in the 1.70's range. (and I don't think that's picked up in the yard!)
Doesn't look good for feed grain prices.

[farming101]

Back in the 80's when the States had about half of a corn crop left over prices hit $1.42 in the Dec 1987 corn contract. That's probably just under $3.00 adjusted for inflation.

This year the forecast is to have about 12% of the corn crop left over and prices look like they are headed below 3 in the Dec 14 futures.

Looked at from this perspective we could be headed for all time low feed grain prices when adjusted for inflation.

[cottonpicken]

Your joking right?

We ARE at all time low prices adjusting for REAL inflation.

[cottonpicken]

Use to cost 35 bushels of corn to buy an ounce of gold now we are talking hundreds and hundreds and hundreds.....

http://chartsrus.com/charts.php?image=http://www.sharelynx.com/chartstemp/free/chartind1CRUvoi.php?ticker=FUTC


We are getting so royally screwed its biblical.

[mcdon]

Remember, we must "feed the world." If I hear that phrase again I'm going to shove some $2 corn up their backside. What a dumb, very dumb perspective.

[furrowtickler]

Hey don't think we should get higher prices - Errol will deem you greedy and then they will find a huge crop of something in Iceland to keep a lid on prices

[charliep]

A couple of things particular to Canada.

1) Tight barley supply demand resulting from lower acres/production. North American crop malt generally poor quality so will still be barley selected inspire of substandard quality.

2) More lower quality wheat that will need a home in the domestic feed market.

3) Higher cost and harder to work logistics trucking system. Finding ways to get feed grains from eastern Saskatchewan/western Manitoba (particularly fusarium laced grain) will be difficult. We could get into a discussion about moving fusarium into areas which do not have the disease but I will leave that issue alone.

4) US corn will get cheap enough to move into the east side of the prairies (likely happening). Southern Alberta will be more protected - particularly in a world of tight/restricted rail transportation system both sides of the border. Will be a basis game and ability to do back haul. Distillers grains will also fit into the mix.

5) Flows of cattle. Calves will move to cheap US feed versus cheap US feed to Canadian calves.

At home here in Western Canada, feed grains are going to the crop with the toughest challenge to higher prices.

[Klause]

Corn is already moving into two feed mills in this area... a buddy of mine who is a trucker says they have hauled 22 B trains up and another 50 to go right now.


Kinda insane with the amount of feed barley here.

[charliep]

I don't know why you guys are looking a the world when you are talking about corn. Of the 13.6 bln bushels of US corn that will find a home/be consumed, only 1.7 bln bushels will be exported with the remaining 11.8 bln bushels used domestically. Of the 11.8 bln bushels, over 5 bln bushels are used for ethanol (government policy supported demand).

There is an expression than rallies have long tails. Farmers knew how to respond to the $7 to $8/bu corn from the 2012/13 crop year.

[charliep]

The expression is short crops have long tails.

[samhill]

And big crops have longer tails.

[errolanderson]

The North American feed market was destined to head lower this year regardless of the size of the U.S. corn crop. But the massive size of this crop is now just adding-insult-injury.

Crude oil is the grand-daddy of commodity markets. And global crude values remain in steady decline of which is pressuring the grain-fed ethanol market.

In fact (IMO), the deflationary pressures on our markets are possibly great enough for the Bank of Canada to cut rates in 2015. Gold appears appears ripe to test $1,200 soon. Silver has been in-collapse.

This is a global problem; not just a farm production problem. All sectors, all industries will be impacted in my opinion. It may be a housecleaning, but maybe a badly needed housecleaning to refresh global economies.

[bucket]

So other industries are going to take a haircut like 8 dollar wheat to 4.5 wheat.

Charliep and errol are prepared to have their wage cut in half because the market is right.

Maybe the government and others could hire experts from other countries that would work for less. The market is always right - labour or commodities.

[blackpowder]

At least I never heard any older farmers believe the new world order shit about commodity prices. Only talking heads and landlords.

[cottonpicken]

The debt bomb can not be dealt with if we get deflation.

The entire western worlds markets are being managed because they have to be other wise the implosion would be castrophic.

Central banks are monetizing the debt and even buying equities.

Re read that and understand it.

The situation is beyond ****ed.

If you think thats all hog wash,seriously go buy some yen,because if your thesis is correct the yen will buy more in the future because they are much further down the path that we are all on.

And then there are the banks.

If there assets deflate in any meaning full way,they are done,look at their leverage ratios,its a very simple to find FACT,its what the stress tests where all apart.And excatly what a bank run is all about which increases the magnitude of the problem,the tier 1 reserves are drained and the leverage ratio goes through the roof and BOOM its done.

Think cdic has enough capital to cover all deposits,its a frickin fraction.