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$6USD Corn...in 2016???

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    $6USD Corn...in 2016???

    NEWS
    Newsom on the Market
    What'll You Have?

    Darin Newsom DTN Senior Analyst
    ..."It is understandable then the interest in a recent prediction of $6 corn this coming year. As we all know, predictions are what they are, and everyone uses something different to come up with target prices. In this particular case, corn's resurgence is based on a coming flood during spring planting, drought during the growing season, and early frost before harvest. The only thing missing is a plague of locusts.

    I'm not going to say this prediction is wrong. However, given USDA's latest round of supply and demand numbers for corn it would take the above scenario, including the locusts, to get the corn market back to $6.00.

    Think back to what USDA did this past Tuesday. Domestic ending stocks were raised 35 million bushels as a result of 10 mb more imports, 25 mb more in ethanol demand, and 50 mb less in exports projected. This brought domestic ending stocks in at 1.837 billion bushels and raised ending stocks-to-use to 13.6%. To put these numbers into context, they are both the largest since the 2005-06 marketing year, just prior to the beginning of the ethanol-driven demand market in corn.

    As they say on infomercials: But wait, there's more! As mentioned above the export projection was trimmed 50 mb to 1.65 bb, or 11% below last marketing year's 1.864 bb. However the most recent weekly Export Sales and Shipment report (for the week ending Thursday, February 4) had total marketing year sales down 27% from the previous year (for the same week) and total shipments running 22% behind. If the latter pace continues through the end of the marketing year, another 30 reporting weeks, total export shipments would be 1.450 bb. That's 200 mb below USDA's February estimate. And where do those 200 mb go? That's right -- to ending stocks, potentially taking U.S. leftover supplies to 2.037 bb.

    And what becomes of those ending stocks when the 2015-2016 marketing year concludes next August? They become beginning stocks for the 2016-17 marketing year."...

    #2
    If no $6 corn... then;

    "DTN NEWS
    Farm Loan Renewals Up
    Fed Reserve Sees More Credit Stress

    Marcia Zarley Taylor DTN Executive Editor
    Bio | Email | Blog
    Thu Feb 11, 2016 11:34 AM CST
    HADDONFIELD, N.J. (DTN) -- Three straight years of falling farm incomes are beginning to extract a toll.


    Farm lenders in the Kansas City Federal Reserve district anticipate a surge of loan renewals and bigger drops in repayment rates after negative widespread farm and ranch losses in 2015. (Graphic courtesy of the Kansas City Federal Reserve)
    The outlook for ag credit conditions deteriorated sharply in late 2015, based on a fourth-quarter survey by the Kansas City Federal Reserve. Bankers expected a surge of farm loan demand and loan renewals and the steepest drop in repayment rates in the last decade, the survey found.

    A similar survey by the Chicago Federal Reserve found 5.0% of the volume of its farm loan portfolio had "major" or "severe" repayment problems, up from 3.9% a year earlier. Lenders in the central Corn Belt anticipate that 2% of their current customers would not qualify for additional operating credit for the 2016 season.

    Meanwhile, the St. Louis Federal Reserve, which covers all or parts of seven Midwest and Midsouth states, also found loan demand climbing and repayment rates slipping.

    All of those factors indicate "pressure is starting to build on some farm borrowers," said Nathan Kauffman, Omaha branch chief and assistant vice president of the Federal Reserve Bank of Kansas City. To date, however, commercial banks continue to report low delinquency rates and a portion of their borrowers with very strong credit."...

    Comment


      #3
      Sounds a lot like oil. The cure for the market is higher prices, yet inventory is to high, every one produces as much as possible with prices continuing to drift lower too pay the bills. Net worth isn't the problem any more it's cash flow. The big and small remaining companies get extremely defensive disposing all non essential business asset, every one is in survival mode as the industry adjusts and the industry consolidates.

      Damn it fells a lot like oil?

      Comment


        #4
        or $3 corn . . . just as accurate an estimate.

        Comment


          #5
          Think most established farms are still in pretty good financial position,thanks in part to drop in value of Canadian dollar and compared with U.S. farms.
          Looks like another year before distress selling of land, even grain selling does not seem pressured by cash flow.
          Still a lot of older and retired farmers not willing to sell land, younger farmers who rent will find it easier to reduce land costs.

          Comment


            #6
            Mark yerself 2 Market, The Dollar Drop is Not Reality - You Broke *******

            Comment


              #7
              X2 on $3 corn.

              Comment


                #8
                Or 15 a dollar bushel corn who knows. I wouldn't bet on anything else other than inflation. Turks and Saudis are about to start WW3. Japan went nirp, Deutch bank collapse list goes on on. Fundamentals are quickly becoming secondary.

                Comment


                  #9
                  Let's take is to 2 and see how much new iron they actually sell

                  Ice Out

                  Comment


                    #10
                    Originally posted by biglentil View Post
                    Turks and Saudis are about to start WW3.

                    Throw in Putin and ....what is that earth shattering KABOOM? Armagedon...

                    Comment


                      #11
                      Originally posted by fjlip View Post
                      Throw in Putin and ....what is that earth shattering KABOOM? Armagedon...
                      With Trump's finger on the red button?

                      Wowsers!

                      Comment


                        #12
                        Trump stirs the pot the listen to what the others say.

                        He started on immigration and his wall.

                        Listen to what the others are saying now.

                        Maybe not as abrupt but essentially the same thing.


                        Same with the middle east.

                        Trump will probably not make it as the candidate but he woke up the American public just a bit.

                        Not a bad thing.

                        Comment

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