COMMENTARY 6/27/2014 **WHEAT QUALITY CONTINUES TO SLIP WITH RAINS**

COMMENTARY

WHEAT

UP 3

Harvest should reach 50% complete by Mon 6/30.   Both factors are likely having an hostile impact on spreads & basis.  The N/U spread was also likely influenced by the slow pace of SRW harvest due to frequent rains. There are reports of poor quality & vomitoxin in more several states, ranging from Missouri to S Ohio.

Quality concerns ARE NOW UPON US!    HIGHER levels of Vomitoxin are being seen in fields that were NOT treated with Fungicide.  Initially, TW are 58 – 60.  As harvest creeps forward, additional rain WILL deteriorate the TW and quality once ripe and warm humid conditions will encourage additional fungal activity.  Significant amounts of damage are being seen, especially in extreme Southern IL.  This week’s conditions are PERFECT for fungal activity, creating scab, shrinking wheat berries, and causing VOMI levels to increaseVomi discounts have soared over the last few days as the markets digest the effects of FEED GRADE quality wheatIT IS ADVISABLE TO CUT WHEAT WETTER THAN NORMAL AND DRY IT TO INTERRUPT FUNGAL ACTIVITY.

Funds are NOW SHORT some -108million bu of wheat.   Early yield reports form the Plains are low as expected.  Harvest ramps up.  Yields locally are hearty, but so are the discounts for Vomitoxin.  HRS conditions dropped 9% in MN due to excessive rains with national ratings dropping 1 to 71% G/E.  Harvest is moving along at 33% vs. 31% AVG with (TX 69%, OK 74%, KS 24%).  Scattered storms this week will further degrade quality and increase discounts.

Winter Wheat conditions are  30% G/E THIS WEEK, 30% LW, and 32% LY.  Conditions for the State of IL are 59% G/E THIS WEEK and 59% LW.  KS G/E is a mere 11%, OK G/E is only 5%, and TX G/E is 15%.  Winter heat HARVESTED is 33% This Week, 16% LW, 19% LY, and 31% AVG

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 see that it IS APPROVED for GLOBAL USE.

 

BEANS

OLD DOWN 5      NEW DOWN 16

Funds are still LONG some +382 mill bu of YSB (that means a large amount of selling would likely pressure the Board).   All eyes are on the report Monday- expected June 1 stocks of 382mbu vs. LY at 435mbu. Avg. guess on planted acres is 82.2 million vs. March intentions of 81.5 million. Old crop stocks are tight and the export announcements today fuel the fire if we don’t see any upside adjustment in old crop supply.  Next Monday’s crop ratings are likely to be 1-2% lower.

US Planting Progress is 95% THIS WEEK, 92%LW, 91% LY, and 904% AVG.  Planting progress for The State of IL was 96% THIS WEEK, 94% LW, 95% LY, and 93% AVG.  US EMERGENCE was 890% THIS WEEK, 83% LW, 79% LY, and 87% AVG.  Emergence for the State of IL was 93% THIS WEEK, 89% LW, 84% LY, and 8% AVG.  US CROP CONDITIONS are 72 % G/E, 73% LW, and65%LY. The State of IL was 73% G/E THIS WEEK and 72%LW.

CORN                      

STEADY

St Louis river levels rising  at +24.0 ft today and forecast to be 24.4 by 7/2.  Flooding and high water in Iowa causes delays in loading of Northern corn barges.  That means more demand for STL barges that are 3 – 5 days CLOSER to the Gulf for off loading onto export vessels.

2% lower on Monday 6/30.  Argentina is just 49% harvested compared to 77% LY.    July first notice is Monday, as is the USDA acreage and stocks report. The recent basis softness was reflected in the CN/CU inverse breaking from 6 ½ a couple of days ago, to 3 ¾ on the close today. Processors and river basis values were mostly unchanged around the IL river delivery system today.  The two week weather outlook appears supportive for developing corn plants.  west the next few days and then shifting southward.  These will increase the moisture excess in the wettest areas.  June will likely be the #1 wettest since 1895 across the corn/bean belt.  A noticeable cooling trend will occur next week, followed by a warmer pattern for the second week of July but this will be conducive to new t-storms with near- to above-average rainfall most likely.

MODAY’s Nationwide Crop Rating  SLIPPED 2%  at 74% G/E vs 76% LW and 65% LY.  The State of IL  INCREASED 2% at 78% G/E vs 76% LW.

BUNGE will not accept delivery of produced from the following seed:

CORN: Agrisure Viptera MIR 162 (Syngenta), Bayer/Genective -Event VCO-01981-5, Agrisure Duracade – Event 5307 (Syngenta), Stine Maize – Event HCEM485, DuPont/Pioneer – Event 4114-3, Monsanto – MON 87427

SOYBEAN: Vistive Gold – MON 87705 (Monsanto), Soymega – MON 87769 (Monsanto), Plenish (DuPont/Pioneer), Bayer – Event FG72

 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 planted.  Ensure what they sold you IS pure (by lab testing your seed) BEFORE planting .  There are contaminated seed issues out there.