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Tidbits, Price Retrospective, Broilers & Ethanol, Markets & Rain Days Update 1/11/24

Highlights


CONAB put Brazil’s bean crop at 155.3 mil mts, down from their December estimate of 160 (USDA 161 in Dec). Their corn production is 117.6 mil. mts, down from 118.5 (USDA 129 in Dec).

 

Forty-two days ago, Kalmbach Feeds in Upper Sandusky, Ohio corn basis (and Poet’s at Fostoria) was -60Z (60¢ under Dec corn futures). Today, Kaklmbach offered one of our clients 0H (zero basis to the March futures). March corn was 25¢ over the December corn on November 29th. That is an 85¢ basis gain in 42 days. And, that, Ladies and Gentlemen, is why people build grain bins or use bags.

 

Looking Back and Looking Forward


CBOT corn and soybeans had a big run-up in prices in 2012 due to dry weather. It was a supply bull market (lack of supply fears due to dry weather in the USA). The 2012 corn high was made August 10th at $8.49 and the soybean high was made September 4th at $17.89.

 

In 2022, another big run-up of prices occurred due to supply concerns as well as strong demand. The supply concern was due to a second year of La Niña and its potential to cause production problems in many parts of the world, which La Niña did devastate Argentina, and reduced yields around the world except Australia. US 2022 corn yields were 3.4 less than 2021 and soybean yields were 2.2 bushels less than 2021. The war starting on February 22, 2022 in the “Bread Basket of the World" scared importers of grain to stockpile grain and oilseeds plus Ukraine (#4 corn and #5 wheat exporter) was taken out of the export market until August.

 

To learn the difference in a supply bull and demand bull market, go to:

 

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