COMMENTARY 8/29/14

The overnight brought showers from Minnesota down to Iowa and across to Michigan as well as limited amounts for the southern plains. Numerous waves of energy and storm systems move across varying areas of the central U.S. over the next 10 days or longer, causing unnecessary wetness for most corn, soybeans and some spring wheat areas. Temperatures remain near to warmer than average through the period, especially south where heat occasionally occurs, aiding Delta harvesting after some t-storms this weekend.

St Louis river levels STEADY at +9.0 ft  and forecast to be 8.2 by 9/2.

CORN                      

DOWN 3

Export Sales on old crop were so-so  at -1.3 mill.  New crop was near the high of the range at 27.4 with much W Hemisphere interest. Still big yields on dry land corn in Tx, KS, OK, MO, AR and the Delta continue with 20% above average.  Also seeing excellent stands North of I-80 in Ia.  According to Bloomberg, one 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.

Pro Farmer results:      U.S. CORN YIELD is 169.3 BPA vs the USDA at 167.4 and the SIZE of the crop is 14.093 vs the USDA at 14.032 bbu.  Also according to Pro Farmer, the producer is 27% sold.  The 5 yr S/O/N average though 12/13  is 31%.  Pro Farmer’s opinion of the IA corn yield is 178.8, which is BELOW the USDA’s at 185. Their MN corn yield is 170.8, DOWN from last year’s 181.1.

The Crop Progress report increased 1 showing corn at 73% G/E this week, 72% LW, 59%LY. The State of IL  increased 2 at 82% G/E vs 80% LW.  US Dented is 35% TW, 22% LW, 21% LY and 43% Avg.  The IL dented 48% TW 34% LW 27%  53% AVG.   US DOUGH STAGE was 83% TW, 70% LW, 67% LY, and 78% AVG.  The State of IL DOUGH was 93% TW, 86% LW, 85% LY, and 87% AVG.

 

BEANS    

DOWN 4

Export Sales amounted to2.3 mbu in cancellations for old crop.  The new crop was again robust at 47.4 vs 28-40 expected. SBM was light for  both old and new. Great weather abounds for a bumper crop of beans.  Delta harvest has started with a report of MS beans making as high as 96 bpa.  Some talk about Sudden Death Syndrome showing up.   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.

Pro Farmer results:      U.S. BEAN YIELD  45.35 BPA vs the USDA at 45.4  and the SIZE of the crop is 3.812 vs the USDA at 3.816 bbu.

US CROP CONDITIONS decreased 1% at 70 % G/E, 71% LW, and 58% LY.  The State of IL was 78% G/E THIS WEEK and 78%LW. US POD SETTING 90% TW, 83% LW, 82% LY, and 89% AVG.  IL POD SETTING was 94% TW, 89%  LW, 82% LY, and 88% AVG.

 

WHEAT          

DOWN 7

The Russians are doing a number on more than just the wheat market.  Russia anticipates recapturing the Egyptian market and sees duties for exports to Brazil being reduced as the Brazil ships more meat into the country.  So far, Aug exports total 4 MMT, up 30% over LY.  The Argentine wheat crop is said to be impacted by heavy rains and an overnight frost in La Pampa may have caused some damage to the crop there as temps fell to 27 F.  South Africa’s wheat crop is estimated 4.8% lower at 1.78 MMT, the smallest out-turn since 2010.  Russia’s harvest is now 54% harvested and bigger than anticipated at 3.4 tons per hectare vs just 2.9 last year. It’s a bad time to have a big crop and poor diplomatic relations with neighboring countries.

US Spring Wheat conditions are 66% G/E THIS WEEK,  68% LW, and 67% LY.  US Spring Wheat Harvested 27% THIS WEEK, 17% LW, 39% LY, and 49% 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.