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The Real Price of Corn is Declining. A High Price of Corn is Very Rare.

World Grain Market Underlying Structures, Political Episodes, Unanticipated Consequences, & Contingencies August 18, 2014 • PRX • Bill Hudson. The Real Price of Corn is Declining. A High Price of Corn is Very Rare. . . . Which means a persistent SURPLUS of feedgrains!.

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The Real Price of Corn is Declining. A High Price of Corn is Very Rare.

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  1. World Grain MarketUnderlying Structures, Political Episodes, Unanticipated Consequences, & ContingenciesAugust 18, 2014 • PRX • Bill Hudson

  2. The Real Price of Corn is Declining. A High Price of Corn is Very Rare. . . . Which means a persistent SURPLUS of feedgrains!

  3. Underlying Structures, Political Episodes, Unanticipated Consequences, & Contingencies

  4. Underlying Structures, Political Episodes, Unanticipated Consequences, & Contingencies Blue Sky #36 Blue Sky #37

  5. PRX Sees Corn Demand Growth Shifting to Exports — All Kinds of Exports!

  6. Hubs’ Production Surplus over Feed Demand Creates Need for Non-Feed Market

  7. Hubs’ Calculated Production Surplus + Paid Set-Aside over World Feed Imports

  8. Actual Feedgrain Ending Stocks and Their Function

  9. US Surplus Feedgrain Stocks Drive the Country’s Agricultural and Biofuel Policy

  10. The Afore-mentioned Corn Surplus for Feed, the Rising World Crude Oil Price, And Recent US Biofuel Policy Created US Corn Ethanol Milling Industry

  11. USDA & EIA Both Forecast Very Low Ethanol Production. PRX Disagrees!

  12. But if crude oil price strong, and if corn price moderate, then corn ethanol = cheapest (& safest) Octane Agent for world market

  13. Details of PRX BS #36 Ethanol Forecast

  14. Calculating China Corn Demand in 2050

  15. History Lesson on Power of Policy

  16. Three Export Hubs = 13% World Population, but 52% World Feedgrain/Oilseed Production (13/52) Stunning Growth of Ukraine/Russia! Russian Black Sea = 4/7 China = 21/14 Europe U$ & Canada = 5/30 North Africa Mid East Brazil-Argentina = 3/15

  17. Black Sea Corn Exports in 5 to 8 Years Will Need “Beyond Mediterranean” Markets

  18. Black Sea Corn (Ukraine) = “Another Illinois”

  19. PRX Sees Corn Demand Growth Shifting to Exports — All Kinds of Exports!

  20. Direct payments repealed A crop farm has a one-time, irrevocable opportunity to elect: Price Loss Coverage (PLC) County Agricultural Risk Coverage (ARC) Individual farm ARC PLC payments occur if US average market price for crop year s below crop’s reference price Reference price of Corn = $3.70, Soybeans = $8.40, Wheat = $5.50 Payment acres = 85% of farm’s base acres County ARC payments occur when actual crop revenue is below county ARC guarantee = 86% of county benchmark, capped at 10%. Benchmark revenue based on Olympic average for 5 preceding crop years Individual farm ARC similar to county but for whole farm revenue Payments limited to $125,000 by a person, $250,000 by a person and wife. 2014 Farm Bill Farm Income Safety Net for 2014-2018 Crops(Note current loan rate for corn = $1.95, soybeans =$5.00, wheat = $2.94) More info see Zulauf, http://ohioagmanager.osu.edu/farm-policy/2014-farm-bill-crop-safety-net-decision-key-considerations/

  21. Commercial Ag Beware! Administration apparently does not examine its own official data on crop yields, seeking truth about climate change. In fact, President declares debate on climate change closed, gives executive orders to EPA to extend rules to cut carbon emissions. Furthermore, Administration blocks efficient transportation of new tight oil supplies, overloading railroads, and ignores role of River expansion and US grain exports in world food security.

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