COMMENTARY 8/20/14

More showers will occur Wed/Thurs across the WCB with  0.50-1.75” and the ECB getting 85% coverage of 0.40-1.20” from now through Fri.  Sat through Mon the WCB will likely get 75% coverage up to 0.80”.  The ECB this Mon-Tue will see 70 percent coverage up to 0.35”, local amounts to 0.80”.  The Midwest should receive additional precip mid to late next week.  The  weather conditions in the Delta will be ideal next week for crop development.  US HRW wheat country’s rain chances will increase Mon – Thurs of next week. The US Northern Plains will be wet through the weekend, delaying harvest progress.

St Louis river levels EASING at +8.8 ft  and forecast to be 6.6 by 8/25.

CORN                      

DOWN 4

More rain and more crop tour info!  The Pro Farmer is seing a 9bpa increase in NE yields compared to 164 bpa this year (USDA—3 bpa higher at 173);. The IN yields are up 11% (USDA says only 2 bpa).  The OH leg of the tour reports avg yields of 182.1 bpa, up from 171.6 LY (USDA: 177, same as LY); SD, 152.7 (USDA: 139) bpa against 161.8 (138) LY.    Several Farm tours are going to this week to see just how big the yields are.  An Argentine default could lead to as much as a 25% drop in corn acres as access to financing becomes difficult—Bloomberg.  The USDA, had the same area UP 7.4% in the August World Agricultural Production report.

Last week, the USDA didn’t believe the trade’s 170 bpa average yield estimate.  They added just 2.1 bushels to the avg yield taking it from 167.4  to 167.4.  This adjustment, with no change in harvested area boosted production 172 mbu to 14.03 billion (vs avg trade guess of 14.252bill). Additional demand of 100 million combined with a 65 mbu smaller beginning stocks estimate left 14/15 C/O changed very little at 1.808 billion.

The Crop Progress report decreased 1 showing corn at 72% G/E this week 73% LW, 61%LY. The State of IL  decreased 2 at 80% G/E vs 82% LW.  US Dented is 22% TW, 11% LW, 10% LY and 27% Avg.  The IL dented 34% TW 17% LW 13%  38% AVG.   US DOUGH STAGE was 70% TW, 54% LW, 49% LY, and 63% AVG.  The State of IL DOUGH was 86% TW, 77% LW, 67% LY, and 76% AVG.

 

BEANS    

DOWN 15    

The bean crop is now growing bigger, like the corn crop.  The Pro Farmer tour shows pod counts for IL up over 40% vs last year at 1453 vs 1040.  A central IL company released their crop tour overnight and their pods per plant count was up 66% vs last year. In IN, Pod counts were 1220 vs 1185 last year and in NE pod counts were down slightly at 1103 vs 1138 last year.  Lanworth’s est puts U.S. bean yield at 46.4, one bpa above the USDA.  TheUSDA announced a 110 K MT SB sale to Vietnam for 14/15 delivery this morning.  The Mato Grosso producer sales are pegged at 8%, down considerably from 31% LY.  They are said to be holding approx 6% of the 2013 crop.

Last week, the USDA added  20 million to old crop exports but were able to keep old crop ending stocks at a workable 140 million by “finding” another 25 million bu!  The new crop #’s look pretty reasonable with the avg yield at 45.4 . The  production value of 3.816 billion fell just 7 million short of the avg trade guess of 3.823.  From this, we must conclude that all the DDGs rejected by the Chinese apparently have had little impact on either domestic corn or soybean meal demand.

US CROP CONDITIONS increased 1% at 10 % G/E, 70% LW, and 62%LY. The State of IL was 78% G/E THIS WEEK and 78%LW.  US BLOOMING was 95% THIS WEEK, 92% LW, 91% LY, and 95% AVG.  BLOOMING for the State of IL was 96% THIS WEEK, 94% LW, 93% LY, and 95% AVG.  US POD SETTING 83% TW, 72% LW, 70% LY, and 79% AVG.  IL POD SETTING was 89% TW, 79%  LW, 74% LY, and 79% AVG

 

WHEAT          

DOWN 7

Ample Black Sea region competition seen.  Russia has so far harvested 66.3 MMT of grain with an average yield of 3.06/HA.  That is up from 54.0 LY with a 2.56 MT/HA yield.  French wheat harvest nears completion at 95% finished and 70% G/E.  The Rosario Grain Exchange has raised Argentine wheat area 3% to 4.36 million hectares.

Last week,  the USDA’s 8.0 MMT increase in FSU wheat production led by a 6.0 increase in Russia.  Exports from the FSU were increased 3.0 MMT (all from Russia).  That was offset by a 3.0 MMT reduction in exports from the EU due to quality concerns following a rain-plagued harvest.  U.S. exports were increased 25mbu but the annual forecast of 925 million is still down 21% from a year ago.  World ending stocks of 193.0 MMT are ample and up 5% from a year ago.

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.

US Spring Wheat conditions are 68% G/E, 70LW, and 66% LY.

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