COMMENTARY 4/28/14

WHAT YOU SHOULD DO BEFORE PLANTING:

– Ask how you can help keep US Ag Exports competitive!  WE STRONGLY RECOMMEND that producers verify that their seed varieties ARE approved for MAJOR EXPORT MARKETS.  The STL River markets ARE planning to test loads delivered.  They RESERVE the right to reject loads with unapproved traits.  If you have seed that is NOT APPROVED FOR MAJOR EXPORT MARKETS, we encourage you to check with your seed representative to exchange for seed that IS APPROVED for GLOBAL USE.

WHAT YOU SHOULD KNOW: 

China’s rejections of a banned variety of genetically modified U.S. corn have now cost the U.S. agriculture industry up to $2.9 billion, a grain group said, on losses from trade disruptions. The National Grain and Feed Association (NGFA) estimated in a report, that rejections of shipments containing Syngenta AG’s Agrisure Viptera corn resulted in losses of at least $1 billion.  This is based on economic analysis that included data supplied by top global grain exporters. The largest estimates of losses are based on the loss in corn price, which  translated to producer losses. – JSA

 

SPECIALTY CORN GROWERS:

Ask your seed company what/how they are testing the NGMO purity on the seed you are going to plant.  Ensure what they are selling you IS pure (by lab testing your seed) BEFORE planting .  There are some contaminated seed issues out there.

 

COMMENTARY

CORN

UP 1

St Louis river levels rising at +15.2 ft today and forecast to be 18.4 by 5/3.

Fund buying.  Market slips off the highs as better planting progress is expected.  Based on weekend rain delays, our percent planted this afternoon was expected to be 20 – 25%……and received a 19% vs 6% LW, and 8% AVG.   IL by itself  is 32% planted vs 5% LW’ 1% LY and 33% AVG.  IN is only 8% planted despite being very dry.  Iowa was only 15% vs 33% AVGExport Inspections were aggressive at 55 – 60million.  French corn plantings are 68% planted.Temps are  in to the mid 70’s with wind to help dry things back out and get the planters rolling again.

Last Monday, the larger of the Southern states are behind with KY 32%,TN 53%.     This years Export program MAY exceed  1.8 BILLION.  China is back in buying US milo….(there is no chance that it is genetically modified).      Despite all the turmoil in the Ukraine, Agroconsult has Ukraine planting at 8% complete, which is a five year record pace.  Canada is expected to plant 8% fewer acres this year.

Ukraine shut off the water to 300,000 acres of Crimea farm ground and now face drought.  Ukraine’s troubles with Russia should help push corn demand to the US as customers are more guaranteed the vessels will load and ship.    France’s parliament votes to BAN growing ALL VARIETIES of genetically modified corn.  Chinese weather watchers have their eye on possible El Nino conditions causing a cooler summer, which in the past has caused significant freeze damage to both corn and soybean crops.

 

BEANS

OLD UP 10     NEW DOWN 1

Whiplash! Tight supplies of old crop remain in focus. Export Inspections were better than expected at 9.3 vs expectations of 4 – 8 and only 3.4/week needed.  Egypt and Western Hemisphere helped keep things tight.  US beans this afternoon expected to be 2 – 4% complete.  Beans and meal complex led everything higher as old crop values/ and crush imports need to be raised higher to meet demand.  South American vessels make their way to the US Coasts to be unloaded.  Imports are revealing just how tight the old crop really is and/or old beans were not high priced enough over the course of the season, to ration demand.  China reported to be auctioning off 3 mmt of reserve bean stocks during the first week in May.  Letters of credit for soybean import are seeing increases of collateral from 10 to 30%

The “Brazillian Bean Armada” are headed for the US.  Eight to ten have already been diverted FROM China this week to other destinations.  Thirty-five  to forty more vessels are loaded/loading  and awaiting in Brazil waters looking for a home destination.   China’s Ministry  of Commerce is expecting 6.9mmt of bean imports into China, which is 3 mmt MORE than last year.  Safras has Brazil harvest at 94%,  average.   Chinese hog prices are at a 4 year low.  This curtails soybean meal demand (see more details below).

Shangai JC indicates Chinese vessel defaults have grown now to as much as 23 vessels that have either been delayed or defaulted on – and counting due to Chinese defaults.  Chinese have now cancelled or defaulted on up to  2 MILLION mt of US and Brazilian beans.    This is the biggest default in 10 years.  From Reuters, a string of defaults on loans, bonds, and shadowy banking highlights the high credit risk of doing business with China and are likely fueled by their slowing economy.   Chinese crushers are rumored to be aggressive competition into the SE Asian meal market (wonder why they are selling meal?).   Also from China, via Reuters, Chinese officials believe that the severe issue of bird flu could lower their third quarter bean demand by 18% MORE than it did last year.  With the negative crush margins, Chinese bean crushers are losing between $80 – 100 per ton currently crushing beans for meal.

 

WHEAT

Unchanged

Dryness in the Southern Plains and HRW growing areas of Western OK and Southwestern Kansas. Keep an eye on the Black Sea region as turmoil heats up with Ukraine and Russia.  Export Inspections were solid at 23.2 vs 17 – 23 expected.  Our winter wheat conditions were expected to be slightly better from rains late last week in very dry Plains.  This afternoon we learn that  US was 33% G/E, 34% LW and 33% LY.   France’s Good/Excellent wheat is holding steady at 75%, 9% better than last year.  The Ukraine has shipped 10 mbu of wheat, totaling 8.2 million.  The USDA is expecting 9.5 million.

ESTL CITY ORDINANCE MAX LOAD WEIGHT 10,000 lbs ~POSTPONED UNIL APRIL 30th.