Let the crop killing commence. Each year, as of late, we start the new year with the Bears up to bat. My question is: Will the Bears bat around the order or will the Bulls somehow find another way to roll up a double play and get out of the jam? I'm thinking a hard hit combo of bad spring weather and increasing demand could certainly set the stage.
Under the current Supply & Demand scenario, it doesn't take a whole lot get a little excitement. At least not nearly as much as when the market believed corn  ending stocks would be north of 2.0 billion bushels. Lets just assume for a moment the USDA lowers the current "feed/residual" numbers to some degree and ending stocks push to around 1.6 billion bushels. Lets also assume, for argument sake, we harvest about 84.5 million acres on 92-93 million planted. In planted 97.2 million acres and harvested 87.4 million. In planted 91.9 million acres and harvested 84.0 million. Point is you can easily argue 84 to 85 million in harvested acres, especially if we run into a few weather hiccups in the spring or more acres get switched away from corn than we are suspecting. In any regard, if at some point during the growing season the trade starts to believe a 145-150 yield could be in the mix a little more bullish excitement will definitely start to surface.
Think about it this way, a 147-bushel corn yield gets you a 5-6% stocks-to-use ratio and prices are racing higher. Even a 152 would put us around 9-10%. Bottom-line: A simple 5-10% reduction in corn yields from the 165 trend-line estimate and we are moving new-crop prices to higher ground. I am always amazed at how a simple 6-7% reduction in yield could mean a 40% plus swing to the upside in price... I know its optimistic, but rather than choking on $3.90 corn perhaps we can enjoy chewing on $5.50 corn?