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1. OK. I am a moderately bullish corn right now. Saying that upfront so you know my bias. I think the market has been overly influenced by three things that have been holding down corn prices
2. The first is downside yield risk. I think the market has been underestimating the chance of below trend yields because of great weather in recent years. History since 1960 says there is about a 15-20% chance of US avg corn yield 10 bpa or more below trend.
3. The second is the expectation of a big switch from soybeans to corn this year. Gary's latest numbers should throw some cold water on that one.
4. The third is weakness on the usage side. This is probably the most valid reason for low corn price expectations. I still wonder what all those cattle, pigs, and chickens in the US are eating. Grain stocks says some impressive feed efficiency gains.
5. Put it all together and I think corn prices are too low and soybean prices too high to get the needed switch from bean to corn acres. Soybean fundamentals are sick. Corn is not nearly so much. A yield of 170 would cause some real rationing in 2019/20
