My 2 Cents Worth
Our ‘new’ website is nearly complete and I will be posting on this site for all to read when it’s convenient for you to do so.
Today was a USDA report day in which they provide their estimates of old crop stocks and predicted new crop stocks using early planting intentions and average yields. Basically the USDA’s best guess let’s say. The basic numbers for Corn were neutral as Old Crop carry was slightly below Trade estimates and New Crop right in line. However, beans indicated the Trade was far off of their estimates as the USDA expanded new crop to 500 million metric tons. This was above Trade estimates of 443 million metric tons. Old Crop was down from estimates of 360 million as USDA posted 350 million metric tons.
World stocks showed an abundance of Corn with 192 million metric tons well above Trade estimates. New crop estimates were 182.7 million metric tons and the USDA came in with 191.9 million also well above Trade estimates. However, Old Crop beans came in at 85.5 million metric tons which was 5 million below Trade estimates.
Argentina’s corn came in at 24.5 million metric tons which was 1/2 million greater than estimates. Brazil’s corn is in at 78 million metric tons – up a big 3 million from estimates. Combined, Argentina and Brazil saw corn stocks up 3 1/2 million from estimates.
Today’s trading session saw beans take a hard hit staying in the red all session as well as meal. However corn saw a slightly positive reaction as some ‘shorts’ decided to exit their positions. As we neared the close corn trimmed its enthusiasm closing only marginally higher.
What do all of these numbers mean in English? World and US inventories are plentiful leaving little hope for an export program from the US. The World is simply far more competitive than we are at this time. US plantings are progressing and many are waiting to see final numbers as farmers attempt to choose the final crops in their planting schedule this year.
It doesn’t appear there is a need to panic on purchasing your feed commodities at this time. I always preach risk management using a system of purchasing in segments of your total usage. I never advocate trying to buy the golden apple by predicting the bottom of the market to buy all of your needs. In addition, when there is limited risk, demonstrated by ample supply that is the time you can wait and look for opportunities and that time is now. So, if you chose to wait and see what’s on the horizon this is the time as I see little risk currently. I still wouldn’t risk the farm and when you see a price you believe you can live with, buy a portion of your usage as insurance against sudden moves in the market. The average will always save you over rolling the dice and trying to hit the bottom every time.
Example, currently we witness traumatic weather events nightly on the news. California sits in what seems like an endless drought while the Midwest is being hammered by twisters and violent hail, while the East seems to struggle escaping the cold temps this year. By themselves these are isolated events, however, it’s an indication of what alters growing conditions for the newly planted crops. This can become an event that could dramatically impact the markets. So, just be aware of weather conditions as we move forward into the year.
I realize how difficult it becomes to make buying decisions when your milk prices aren’t where they need to be. So wait and be prepared to buy a percentage if and when that opportunity occurs. We also offer viable by-product blends to compliment your rations and reduce your feed costs. During economic times such as we are facing money saving opportunities become extremely important. We are here to assist you in making the very best feed decisions possible. Our goal is always to help make you as successful as possible.
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