COMMENTARY 9/26/14**ND SRW IS FULL**

St Louis river levels DROPPING at +14.6ft  and forecast to be 8.4 by 10/1.  **SHOULD RIVER LEVELS CONTINUE TO DROP, THIS WILL CAUSE EVEN HIGHER FREIGHT COSTS PER BUSHEL.  To show JUST how much freight has skyrocketed in the last couple of weeks: On 9/10 it cost only .33 cents per bu to get from STL to the Gulf by barge.  On 9/17 it cost .87 cents per bu.  On 9/26 it cost $1.20 per bu !!

Ideal weather continues into the early part of next week for the Central Belt.  The intermediate outlook will begin to change from west to east Monday-Friday as two systems develop areas of rain, but a long-term harvesting or planting problem is not foreseen. Excessive rainfall may reduce wheat quality in South Brazil, while a lack of rain results in favorable weather and conditions for planting in Argentina.

CORN                    

DOWN 3  

We’re back to the realization that the yields are SPECTACULAR!!   Nearby freight continues to soar and harvest hasn’t really even started yet.  Full season corn is 30-40% planted in Brazil while the Rosario Grain Exchange says the Argentine corn crop is 50% planted.

DO YOU HAVE A SIGNIFICANT PORTION OF YOUR MEGA CROP SOLD??!!  We continue to hear 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, 55%LY. The State of IL   83% G/E vs 82% LW.  US Dented is 90% TW, 82% LW, 90% LY and 92% Avg.  The IL dented 95% TW 91% LW 93%  LY, and 93% AVG.   US MATURE  was 42% TW, 27% LW, 37% LY, and 54% AVG.  The State of IL MATURE was 56% TW, 37% LW, 44% LY, and 63% AVG.  US HARVESTED 7% TW, 4% LW, 7% LY, and 15% AVG.  The State of IL HARVESTED 6% TW, 2% LW, 4% LY, and 23% 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    

DOWN 13           (The lowest nearby soybeans have traded since February 2010!)

Funds sold an estimated 6,000 contracts of beans today, bringing the weekly total to over 20,000 contracts.  China suspends imports of an unidentified GMO soybean variety–Reuters.  Brazil bean planting is estimated to be 2-3% planted, slightly ahead of past 2 years while Argentine producers have yet to start.  Export Sales were hefty on Thursday at 94.3 vs trade expectations of  55 – 99!  ~But that wasn’t enough to make up for the huge yields in the South.  So far it looks like early indications are that the bean yields are being reported as 60’s, 70’s, and 80’s!

Soybean planting in Parana and Mato Grosso off to a fast start with an eye towards being able to plant a 2nd crop following harvest.  Recent showers are adding to southern Brazil’s planting ideas and production potential.  The addition to the world’s bean carry-out (stx/use ratio) COULD very well be the LARGEST EVER since the export era began (32% versus 25% in the current year).

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 71 % G/E, 72% LW, and 50% LY.  The State of IL was 76% G/E THIS WEEK and 76%LW. US DROPPING LEAVES 45% TW, 24% LW, 44% LY, and 53% AVG.  IL DROPPING LEAVES was 45% TW, 20%  LW, 34% LY, and 46% AVG.  US BEANS HARVESTED 3% TW, NA % LW, 3% LY, and 8% AVG.  US HARVESTED – NA

 

WHEAT          

STEADY

Export sales disappoint.  Lot’s of wheat in the world!  Export Inspections were routine at 18.6 versus 17-22 expected and 16.6/week needed.  The Ukraine exporters continue to pump out the wheat for export with Sep exports up nearly 50% yr to yr at 1.94 MMT!

Informa pegs U.S. crop at 2.046 bbu, 16 million above last USDA. 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.

US Winter Wheat Planted is 25% G/E THIS WEEK,  12% LW, and 21% LY, and 22% 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.