Developing Countries Will Lead Global Rice Import Growth in 2013-22, Says USDA Rice growers positive California MG prices are UP Russia MG Harvest coming to end Egypt open rice exports Vietnam’s rice export in tough competition with India Thai rice exports in May Rise Above Target This Year Viet-Nam Rice exports likely to fall this year
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U.S. has the 'hammer' on corn export supplies
Because world corn ending stocks remain tight, the U.S., with its huge supply, is in position to be the biggest player on the export scene.

Joe Victor, analyst, said the challenge for U.S. producers is trying to catch the market reacting to world attention.

Globally, the corn ending stocks-to-use ratio at 14.8%, is at its second tightest level since 1980.

In comparison, the world corn ending stocks in the 1990s averaged between 28%-29%. In 2004, the world corn stocks-to-use ratio was 16.6% at this same time of the year.

"Globally, we have the biggest hammer in the tool box right now," Victor said. "So, the rest of the world needs corn and if weather problems start occur this spring, buyers will only have one place to go."

Victor was quick to point out that Argentina, a big corn exporter, is expected to plant more soybeans and less corn this year.

"They (Argentineans) are telling the world they are going to be planting a 39-40 million metric ton of soybeans and fewer corn acres. That strengthens our handle on our hammer," Victor said.

With 'the middleman' (elevators), domestic end users, and the foreign buyers aware that 20% of the U.S. corn crop is unharvested, a turnaround in the corn market is not expected for awhile.

Therefore, in the short-term, collecting a loan deficiency payment on corn is the best marketing strategy, Victor said. "The market is saying to these producers to store the crop. Let's do that and worry about capitalizing on the market when the world comes calling."

As a first sign of the corn market possibly turning around, Victor urged producers to watch for a $0.09 difference between the December and March futures contracts on the Chicago Board of Trade.

"A narrowing spread to the $0.09 level is a signal to start pushing some of this year's stored crop to the market," Victor said. "We also want to watch outside forces such as a basis or futures rally."

Victor suggested March futures at $2.30 per bushel, May at $2.40, and July at $2.51 as other upside targets.

Meanwhile, with an estimated 2.4 billion bushel ending stocks figure for August 2006, Victor isn't surprised the market is showing little improvement.

"The market is feeling the weight of the U.S. ending stocks right now, but it doesn't have to be that way for a great deal of time to turn things around," Victor said. "August 2006 is a long ways away, and a lot can happen between now and then to help this market."
MGR Archive 4.11.2005
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