Technically Speaking
Darin Newsom DTN Senior Analyst

Monday 07/21/14

No Friends Yet for Cash Corn
The cash corn market continues to crumble.[Read Full Blog Post]
Posted at 10:04AM CDT 07/21/14 by Darin Newsom | Post a Comment
Comments (9)
Darin this record production is so blown out of the water by this corrupt USDA "estimates".This government controlled "market" is not good for farming, this is supposed to be a free country, we now more than ever need freedom from government control. God blesses us with a good crop and we have to live with "market" collapses from "estimates." Again the only hope producers have for a fair price is a disaster some where. How sick is that.
Posted by DAVID/KEVIN GRUENHAGEN at 1:33PM CDT 07/21/14
David, Kevin: Thank you for your comments. My thoughts on all things USDA are well known. I've long been a proponent of letting the market, any market, sort out its own supply and demand issues. That's one of the reasons I focus so much attention on the cash value, the intrinsic value, of a market. To me it is a better indicator of strength/weakness. In the case of corn, the fact the NCI.X has fallen to the lower 34% of its price distribution range reflects the actual old-crop supply and demand situation that exists today. What will happen when harvest rolls around is hard to say, but I still believe the cash market will be a better indicator of how large production may actually be. Thanks again for your comments.
Posted by DARIN NEWSOM at 2:20PM CDT 07/21/14
My problem isn't with the USDA's questionable stocks and production numbers, my problem is why our Government chooses to hamper American Agriculture by broadcasting these numbers to the world. To be fair and equitable, shouldn't the Govt. broadcast new car inventories, semi-conductor inventories, rolled steel, dishwasher, refrigerator, and other manufactured goods inventories (to name a few examples). Then everyone could decide when to purchase based on over-supply or shortage.
Posted by Lewis Flohr at 9:07AM CDT 07/22/14
Good morning Lewis. I share your thoughts in that this is not, nor was it ever, something the government should be projecting. Initially, USDA reports were intended to level the playing field between producers and large commercial traders who had access to supply and demand information. However, that system fell apart as spec trade in commodities grew and prices saw increasingly volatile swings on flawed data. Today, all kinds of fundamental information is available to traders/producers/etc. As I stated in Market Matters blog, USDA should be limited to one report, looking back at the previous marketing year rather than forecasting ahead monthly. Thanks for your comments.
Posted by DARIN NEWSOM at 9:28AM CDT 07/22/14
Are all the producers wanting government out of the forecasting business because it influences prices also in favor of getting rid of RFS which skews demand and prices? After all, government doesn't require you to purchase a new car, semi-conductors, rolled steel, dishwasher, refrigerator and other manufactured goods (to name a few examples).
Posted by David Kessler at 11:28AM CDT 07/22/14
Interesting point David. But to me it doesn't change the argument that the system would be better served by ending monthly USDA supply and demand and crop production reports, replacing with one final backward looking accounting. Did the Energy Policy Act of 2005, including the RFS, change the market? Absolutely. But it changed all aspects of the market: Supply, demand, investment interest, basis, price distribution, etc. Thank you for your comments.
Posted by DARIN NEWSOM at 11:45AM CDT 07/22/14
It is already 1.94 cash bid from Southwest Grain in Lemmon SD
Posted by JAMIE KOUBA at 11:52PM CDT 07/22/14
Good morning Jamie. I've been watching the developments in the cash corn market in the Dakotas on DTN's Cash Bid map. There are a number of locations that are getting close to that $2.00 mark in that part of the country. Thanks for your comments.
Posted by DARIN NEWSOM at 5:06AM CDT 07/23/14
I didnt Know corn had any friends ever. most used under priced always costly to grow
Posted by andrew mohlman at 8:18AM CDT 07/25/14
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