COMMENTARY 9/17/14

Big temperature swings over the next 10-14 days, resulting in a low to moderate chance for frost early next week across the northeast half of the soybeans.  Scattered storms temporarily slow harvesting in the Corn Belt within Friday-Sunday, but organized rainfall is increasingly likely to focus further to the southwest, slowing and stopping HRW wheat planting in the Central and Southern Plains.  At least five consecutive days of drying follow the exit of rain to aid corn and soybean harvesting.

HIGH WATER!   St Louis river levels EASING at +25.1ft  and forecast to be 18.2 by 9/22.

CORN                      

Steady    (Now using Dec Futures)

Weakness noted as most yield reports continue to be very good and/or record.  HUGE yield reports continue to roll in.  That explains why we are hearing more comments of sub $3.00 corn futures for the 14/15 crop year.

Cargill’s lawsuit against Syngenta AG over rejections of genetically modified U.S. corn by China may be just the start of legal challenges against global seed makers over trade with one of the world’s biggest markets. Trading giant Cargill said in court documents on Friday that it had lost more than $90 million because Syngenta sold Agrisure Viptera corn, known as MIR 162, to U.S. farmers without first obtaining import approval from China, which has turned away boatloads of U.S. crops containing the variety over the past year. The lawsuit will be a test case of who is ultimately responsible for such rejections that damage international trade: the seed companies that develop unapproved GMO traits or the merchants who sell grain that may be contaminated with it. – Reuters

Monday’s Crop Progress report remained unchanged showing corn at 74% G/E this week, 74% LW, 53%LY. The State of IL   82% G/E vs 82% LW.  US Dented is 82% TW, 69% LW, 79% LY and 85% Avg.  The IL dented 91% TW 84% LW 82%  LY, and 86% AVG.   US MATURE  was 27% TW, 15% LW, 20% LY, and 39% AVG.  The State of IL MATURE was 37% TW, 17% LW, 22% LY, and 50% AVG.  US HARVESTED 4% TW, NA LW, 4% LY, and 9% AVG.  The State of IL HARVESTED 2% TW, 1% LW, 1% LY, and 13% AVG.

The crystal ball of Rabobank ‘s Price Prognosis has Q3 corn valued at $3.70/bushel and  Q4 at $3.50.   According to Bloomberg, another pundit expects U.S. corn prices to remain sub-$3 from 15/16 through 19/20 crop years with 15/16 ending corn stocks rising to nearly 3 bbu.  An IL Farm Appraisal group reports a 4.2% drop in average Illinois farm land prices, to $13,000 for the first half of  2014.

 

BEANS    

Up 2

Slight gains as market balances high early yields with frost potential next week.   A bountiful crop swells in the pods!  Giant yield reports flood areas in harvest.  Hightower Report:  beans could fall to $8.50.  CONAB says the Brazil bean crop is increasing 400 K MT to 86.1 million, a 4.6 MMT gain over last year’s figure.  Celeres sees a 6% larger Brazil bean crop in 14/15, rising to 91.36 MMT on 3.6% more acres.

The Rabo Bank price outlook for Q3 is $12.00,  Q2 is $10.00, and $10.60 in 1st quarter of 2105, expecting higher acreages in Brazil and Argentina despite prospects of lower prices.   A Farm Future’s survey indicates a 2.1% increase in 2015 U.S. soybean plantings to 86.6 million and sees returns from both beans and corn falling below the cost of production.

US CROP CONDITIONS remained unchanged at 72 % G/E, 72% LW, and 50% LY.  The State of IL was 76% G/E THIS WEEK and 78%LW. US DROPPING LEAVES 24% TW, 12% LW, 24% LY, and 32% AVG.  IL DROPPING LEAVES was 20% TW, 7%  LW, 12% LY, and 25% AVG.

 

WHEAT          

UP 3     (Now using DEC Futures)

Sluggish export demand concerns over the longer term and abundant global availability and export competition rises.  Ample supplies and concerns the Black Sea crops may get even larger.  Inspections were respectable at 20.0, up from 19.6 LW, but below LY’s 46.5 mbu total. YTD they were down 34% at 280 mbu. Trade was expecting 17-22 with 17/week needed.

According to Rabo bank, there is very little upside price potential in Q3 and Q4 at $5.40/bu.

US Winter Wheat Planted is 12% G/E THIS WEEK,  3% LW, and 11% LY, and 11% AVG

Be prepared to carry lower quality wheat through fall harvest an into NEXT year’s wheat.  The market is well armed to pay you for your troubles.

FOR QUALITY:  Keep the bin fans on, take moisture below 13.0 to help ensure that conditions inside the bin are not conducive for fungal growth.  If they are, vomitoxin levels CAN grow if the fungus is allowed to prosper.