COMMENTARY 4/22/14

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 7

St Louis river levels have evened out again at +14.7 ft today and forecast to be 14.5 by 4/27.

Funds bought an estimated 12,000 contracts today and the market did not believe that we are only 6% planted vs 3% last week, 4%last year, and 14 % for the 5 yr avg.  Even the larger of the Southern states are behind with KY 14%,TN 28%.  The five Southern states are 74% planted, 14% behind their 5 yr avg.  Next Monday’s report is expected to be in the low teens.  Monday’s Export Inspections helped support as were ABOVE expectations at 63 million vs expectations of 41 – 61 million.  That is 26 million ABOVE what is needed each week.  Argentine corn harvest is 12% behind last year at 20% complete according to BA Exchange.    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.  MGR says today’s farmers can plant approx 50 acres/hour, depending on field size.

Ukraine’s troubles with Russia should help push corn demand to the US as they will be 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

DOWN 19

Fund Selling and 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. Monday was another week of disappointing Export Inspections.  Needing 3.7 per week, we received 5.1 vs expectations of 5 -14 million.  BA Exchange believes Argentina is 21% harvested, behind last year by 17%. Safras has Brazil harvest at 90%, 4% ahead of 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

Up 5

Still need rain in the parched HRW growing areas of Western OK and Southwestern Kansas.  The Southern Plains has a more favorable outlook which is a lot more promising than what we’ve been seeing the last month.  Unseasonal heavy rain is slowing movement of India wheat.  so far, there has been a 40% reduction at 6.7 mmt. The Governor hopes to buy 31mmt this year.  Monday’s Export Inspections were 18.2 million vs expectations of 18 -26 million combined.  Our winter wheat condition was the same as last week at 34% Good/Excellent and 35%last year.  France’s Good/Excellent wheat is holding steady at 75%, 9% better than last year.  The Ukraine has shipped 10 mbu of wheat during the first half of April, up from 4+ million a year ago.   Keep an eye on the Black Sea region as turmoil heats up with Russia.

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