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 Land Booming

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MKeeney
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PostSubject: Land Booming   Mon Jun 11, 2012 7:14 am

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PostSubject: Re: Land Booming   Mon Jun 11, 2012 10:27 am

Land booming here as well. The Gold Mines are buying up all the ranches for the water rights and the mineral rights. And Las Vegas is buying up all the water rights so they don't run out of water. And then we have the Geo-Thermal people and they are buying as well.
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PostSubject: Re: Land Booming   Wed Jun 27, 2012 7:38 am

avoiding too many topics; posting here
from yesterday...

Box prices turned higher when everyone was forecasting lower. The choice cutout rose $1.50 to $198 and select quoted at $180. The choice/select spread was $18. The choice/select spread has quickly and steadily widened as USDA reports 2% fewer choice cattle than prior year.
$18/cwt...what is the cwt premuim for Cab over Choice - ?
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PostSubject: Re: Land Booming   Tue Jul 17, 2012 7:13 am

MKeeney wrote:
avoiding too many topics; posting here
from yesterday...

Box prices turned higher when everyone was forecasting lower. The choice cutout rose $1.50 to $198 and select quoted at $180. The choice/select spread was $18. The choice/select spread has quickly and steadily widened as USDA reports 2% fewer choice cattle than prior year.
$18/cwt...what is the cwt premuim for Cab over Choice - ?

that was June 27...and now...

July 17, 2012



CATTLE MARKET REPORT AND ANALYSIS





Corn is looking for a top and cattle a bottom. Following Monday's dramatic run up, corn opened the overnight session with even more strength as the crop report confirmed and elaborated on deteriorating crop conditions. As corn reach towards its all time historic high, feeder cattle plummeted.



Show lists reflected the opinions of many who were ready to jump ship and push cattle to market rather than hold and pay the piper for feed. Most cattle were priced at $118.



Box prices were modestly lower in early week trading following last week's $6 decline in the choice cut out. Choice was quoted at $184 and select at $172. The choice/select spread has narrowed to $12.



Feeder cattle are in a freefall. Video auction cattle are being passed out and brought back and passed out again. Futures are trading limit down for multiple days in an attempt to realign feeder prices to the quick changing corn prices. Oklahoma City reported another $8-10 fall in feeder prices. The relationship between replacement cost and fed cattle prices is undergoing a major change. It now appears likely fed prices will move premium to feeder prices as cost of gain skyrockets. A 750# feeder steer was selling for $133.



Corn is nearing a all time high. Rationing will necessarily move into this market. USDA drop the crop rating to 31% good and better compared to 60+% last year. This is the secord worst rating exceeded only by the 1988 rating of 17%. The corn basis in Guymon Oklahoma is $.90 over the July contract. Corn is now pricing into most rations at $15.50 cwt..



ITS A NO BRAINER



Last week the EPA met with USDA officials for a regularly scheduled meeting to discuss mutual areas of interest. It is within the EPA's power to waive the mandatory ethanol requirement for 10% of gasoline to be a ethanol blend. EPA in consultation with USDA and the Department of Energy must determine an economic harm if the mandate continues and must hold a 90 day comment period before granting the waiver. Someone must first request the waiver.



The economic harm of continuing the mandate can be justified under a sufficient harm criteria and listing the reasoned support would fill thousands of pages of a report, but foremost is the cost of food to all consumers. Current corn prices will quickly result is large increases to meat prices at the market. Corn and corn byproducts also touch many other food products in the consumers grocery basket.



Secondarily, ethanol does not "price in" to the energy mix under the current price structure. Oil has declined from over $100 to the $80s and while this has happened corn has moved from $5 to close to $8 a bushel. Given a free market, ethanol would not be purchased by refineries at current prices because it would make gasoline more expensive. This might be part of the reason the past few weeks have seen the largest decline in the ethanol grind for many months.



As often is the case, politics frequently gets in the way of reason. Any rational market would drop ethanol. Any logical extension of the mandate would be idiotic. But the ethanol industry has been solidly behind Obama since the last election and he has shown his appreciation. Secretary Vilsack even had the nerve to assert that ethanol production had no impact on corn prices in spite of ethanol plants consuming 40% of the crop. When asked last week about a waiver for the ethanol mandate, Secretary Vilsack said he did not see it in the cards.



It is time to put politics aside and move quickly for a waiver of the mandate. This is not a move to benefit the meat industry but is a rational correction to a failed government program and an effort to deliver open free markets to the country.


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PostSubject: Re: Land Booming   Fri Jul 20, 2012 7:57 am


--------------------------------------------------------------------------------

Talked to a guy yesterday that said no one can get much distillers grain because most of the ethanol plants a not running. Any of you guys that are closer to the corn belt seeing this? Price of crude is too low for the ethanol to compete is what he was telling me. Won't this in the end be bearish for corn and bullish for cattle or am I just wishful thinking? Seems like a pretty big player of corn out of the game though and in my mind that should show up in corn prices even in a short year.

What say you? Jack
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PostSubject: Re: Land Booming   Fri Jul 20, 2012 8:04 am

Jack McNamee wrote:

--------------------------------------------------------------------------------

Talked to a guy yesterday that said no one can get much distillers grain because most of the ethanol plants a not running. Any of you guys that are closer to the corn belt seeing this? Price of crude is too low for the ethanol to compete is what he was telling me. Won't this in the end be bearish for corn and bullish for cattle or am I just wishful thinking? Seems like a pretty big player of corn out of the game though and in my mind that should show up in corn prices even in a short year.

What say you? Jack

I asked this on drought strategy before I read this thread, but I will ask it here as well. Another question I have is, I've heard or read that this is the thrid largest corn crop in terms of acres in history. Did I hear that right? Jack
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PostSubject: Re: Land Booming   Sat Jul 21, 2012 6:31 pm

I read it was the biggest seeded acreage since 1937, 96.4 million acres. Even with the predicted yield reduction from 166bu/acre to 146bu/acre that's still a lot of corn. Average yield in 2002 was 129bu/acre.

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