CORN - LOOK FOR A VERY STRONG MOVE UP IN CORN. ......HERE'S WHY: IF THE TRADE IS WILLING TO BELIEVE AN INFORMA STYLE CORN PRODUCTION NUMBER (OR FCSTONE FOR THAT MATTER) EVEN HELEN KELLER CAN NOW FIGURE OUT THAT THE 2007 - 8 U.S. CORN S/D IS OUT OF CONTROL.
WITH A 151 TYPE YIELD IDEA FOR THIS PAST YEAR, THE TRADE PROBABLY WONT BE WILLING TO IMAGINE OR DISCOUNT A NEW CROP YIELD NEXT YEAR MUCH ABOVE 155 (ALTHO STATISTICAL "TREND" IS HIGHER). IF WE ADD 5 MLN CORN ACRES NEXT YEAR, WITH THAT ASSUMED YIELD, U.S. CARRYOUT DROPS TO 100 MLN BU - REQUIRING RATIONING OF NEAR 700 MLN BU OF USE. IN 1996 WE TOOK CORN TO 5.00 TO CUT DEMAND EVENTUALLY 800 MLN BU.
CORN SUPPLIES ARE OBVIOUSLY SECOND LARGEST EVER THIS FALL BUT COMPELLING ARITHEMTIC OF THE 2007-8 BALANCE TABLE IS A "PROBLEM" THAT NO LONGER CAN BE DEBATED OR DENIED. THE TRADE WILL ATTEMPT TO PREEMPTIVELY "SOLVE" THAT PROBLEM PRIOR TO SPRING BY TAKING PRICE HIGH ENOUGH TO SWITCH A RECORD EVER AMOUNT OF ACRES. LARGEST NON PROGRAM CHANGE CROP ACREAGE SWITCH HAS BEEN 3.3 MLN ACRES. WE "NEED" TEN MILLION ACRES TO BEGIN TO STABILIZE STOCKS AT NOW IN THE 2007 CROP YEAR. ......
