Dead Corn 2012

I recently drove through Minnesota, Iowa, Missouri, Kansas, a tiny part of Oklahoma, and Arkansas.  While driving on US 69 South from Kansas City just across the border from Missouri (so extreme eastern Kansas) I took some pictures of the corn and bean crops.  Corn was just dead as far as the eye can see.  I do not think the corn is supposed to look like this on July 31st.  The crop starts out great in Minnesota where they had tons of rain, then gets progressively worse as you drive south through Iowa and Missouri until you just get dead stalks with no green on them at all.  You can see in some of the pictures they have already cut the crop.  So these are either acres that must be removed from the balance sheet or acres with 0 yield.  Take your pick.

Now the August USDA Crop Production Report is in 3 days.  I have seen wildly disparate production estimates ranging from the nebulous “under 10 billion bushels” to somewhat above 12 billion bushels.  My guess is that in reality it will be the former while the USDA, not wanting to incite worldwide panic in an election year, will come in closer to the latter on Friday morning at 7:30AM Central.  Carry out and thus stocks to use ratios could be historically low.  The guvmint does hold one wild card though that may be preventing price from straying too far above $8/bushel and that is the ethanol mandate.  They can lower usage at a stroke by lowering the mandate.  Of the 5 Billion bushels or so that is used annually for ethanol how many does that represent?  Who knows.  Maybe somewhere between 1 and 3 billion bushels?  I am looking to buy corn once Funds have their eventual meltdown if that occurs far enough in advance of the South American planting season.

Corn Map
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