Friday, April 5, 2013

Afternoon Grain Market Commentary for 4/5/2013

Afternoon Comments 4/5/2013

Friday, April 5, 2013, 3:08 pm
Submitted by: Kyle Lehman


Both corn and soybeans closed lower today making it the 5th out of the last 6 trading days with lower closes. Corn did manage to hold yesterday’s low for nearby corn futures which may suggest the market is trying to form a bottom. Trade has been focused on trying to figure out what the ending stocks will be for Wednesday’s USDA S&D after last week’s stocks number threw people for a loop. The current average estimate is an increase of 204 mln bu. bringing the ending stocks up to 836 mln.

Soybeans were drug down on reduced demand from China after the new strain of bird flu has been reportedly responsible for 6 deaths causing the gov’t to kill 20k birds. The question remains: How much has/will this bird flu strain reduce demand? Chinese markets open back up on Monday which should give us a better grasp on the situation and long effects. For the time being expect the focus to remain on China and the bird flu as opposed to South America logistic problems.

Outside markets were bearish with crude oil trading nearly $5/barrel off the recent highs. Equities traded lower on the release of another poor jobs report that added 88K jobs for the month of March. Despite the poor job creation figure unemployment dropped to 7.6% indicating more people have stopped looking for employment. The 5 day forecast is calling for a good amounts of precipitation for the Delta and Western Corn Belt followed by a drier period that should allow planting to get started.

*Reminder new trading hours take effect Sunday night. Markets will pause in the morning from 7:45 to 8:30 am and have a new close of 1:15 pm. Night sessions will now open at 7 pm (graph below).

A.M. Grain Market Commentary for 4/5/2013

AM Comments 04/05/13

Friday, April 5, 2013, 8:37 am
Submitted by: Dustin Weiner

Good morning!

Our markets are mixed this morning with corn trading a bit higher while soybeans are weaker.  Soybeans continue to slide on fears of reduced Chinese demand.  Chinese authorities have reportedly killed more than 20,000 birds from a live poultry market in Shanghai after it was found in pigeons for sale there.  Both the soybean and soybean meal markets are on shaky ground because of this.
 
Weather… a warming trend is in the forecast for the corn belt with rain chances in the front end while the extended forecast looks drier.  The 8-15 day forecasts is indicating that planting should progress nicely through the last half of the month.

The outside markets are a mixed to bearish input this morning.  Equities are under pressure and crude oil is weaker.  May crude oil futures are down over $4.50/barrel on the week.  The daily chart of May crude looks rough – after starting the week trading above all of their moving averages, crude is now trading below those same moving averages.  Quite a drop.

Currently
Corn is 3 to 4 cents higher
Soybeans are 8 to 12 cents lower

Thursday, April 4, 2013

To the Oathouts, ‘Chasing the Dream’ means chasing higher yields

Farmers Cooperative Company customers Kurt and Rhonda Oathout recently received national recognition in the Asgrow Yield Chasers Contest for growing the highest yielding soybeans of all maturities in 7 out of the 10 Corn Belt States -  including Iowa, Illinois and Indiana. As if that wasn’t impressive enough, the soybean yield of 89.77 bushels per acre stood alone as the highest in the nation in the 2.6 to 3.1 maturity.

“In the business of farming, our ‘factories’ exist outdoors. Our number one resource is our top soil. I’ve always tried to manage my business by focusing on the soil,” Kurt says. “Along with my neighbors, I’m fortunate enough to be farming some of the richest soil in the world right here in Iowa. I take my role as a steward of that ground very seriously.”

Kurt and his wife, Rhonda, farm in Greene County, Iowa, Northeast of Jefferson. “We raise corn, soybeans and kids,” Kurt jokes. “Rhonda has always been involved in the farming operation. She actually plants the soybeans at the same time I plant the corn. I figure if it’s a good day to plant corn, it’s a good day to plant soybeans as well.”

Kurt is a fifth generation family farmer who recognizes the importance of women in Agriculture. “When I introduced my wife at the national Commodity Classic awards ceremony in Florida and noted the fact that she had planted all the soybeans, the whole crowd broke out in applause. We can’t underestimate the role of the family in this business of feeding the world,” Kurt adds.

Kurt also credits his neighbors and his FC Agronomy team for their roles. 

“Rhonda and I are surrounded by good farmers who know how to grow crops while protecting the soil and water quality which are the foundation of what we do. I’ve learned a lot from them. I actually heard from another farmer that they really trusted Brian Berns at FC, and that he’s really been a big part of their success on the farm. I called Brian up and quizzed him some. I felt like I could trust him,” Kurt said. “That was five years ago. We’ve been working together ever since.”  

Kurt feels that as a cooperative, FC has the philosophy that what is good for the farmer is good for FC. “FC is your partner,” Kurt says. “ In order for them to be successful, the farmer needs to be successful. The FC Agronomy team has contributed greatly to the success of our operation. They’ve been there with solutions to some of our biggest challenges and partnered with us in decision making at every level. They help us sort through new products and technologies and figure out what works on our farm and even on specific acres. They help us deal with the unique hands the environment deals us each year in terms of weather, pests, and conditions. Like I said; I can trust them,” Kurt adds.

FC’s Brian Berns talked a little about what it took for the Oathouts to produce yields that would win at the national level. “Last year was exciting because Kurt won the soybean yield contest at the District level for the mid maturity group 2 beans. So the challenge became, how do we top that for next year,” Berns recalls.

“As Kurt said, everything begins with the soil. We started looking at each field and developing a fertility program. Then we got together and started talking about soybean varieties and trying to match the right soybean to the right acre and soil types,” said Berns. 

“The next thing that really worked in our favor was planting. Kurt is in a unique position that he has Rhonda to plant the soybeans. With the dry, abnormally warm, early spring, they were able to get out there and plant the field in late April. We chose the variety Asgrow 2931 and treated it with Acceleron fungicide, insecticide, and an inoculant to help get the beans off to the best early start.   We think this combination of seed treatments combined with the early planting date is the right thing to do to maximize bean yields. Little did we know it was going to be an even bigger deal with the growing season we were about to have. 

"Things were looking good, we got a good emergence. We used an early preemergent herbicide combined with a timely post emergent pass that included a fungicide and foliar feed product to give us yield maximizing weed control and a healthy soybean plant. We had some spider mites start to colonize the field in mid-July so we did an insecticide, another fungicide, and another foliar feed application at that time to protect the field to harvest. It got down to harvest, and again, timing was everything,” said Berns.

According to Berns, Kurt “nailed it” when it came to timing. “The day we went out to do the yield check, we caught the beans at 13.1% moisture. In most cases last fall that soybean moisture didn’t last more than a few hours. Beans wanted to go from too wet to too dry in 24 hours,” he said. “I had the opportunity to jump in the combine with Kurt while FC’s David Hoskins was out measuring the 1.5 acre contiguous area for the contest,” Berns continued. 

“These combines today are pretty amazing as far as what they can eat for beans; but I’m here to tell you, that combine was begging for mercy with these beans. They were fantastic! I mean, in 18 years in the business, I’ve never seen soybeans like this. It was fun just to watch the yield monitor bump up. We couldn’t believe it when we had it on the weigh wagon – it felt like we were doing a corn check.”

After sharing the story, both Kurt and FC’s Brian Berns agree that once you see these kinds of yields, it becomes an even bigger challenge to top them in the future.
“We’re up to the challenge,” says Berns, nodding. He looks at Oathout.

And the chase is on.


A.M. Grain Market Commentary for 4/4/2013

AM Comments 04/04/13

Thursday, April 4, 2013, 8:11 am
Submitted by: Dustin Weiner

Good morning!

The corn and soybean futures markets are weaker this morning on little news.  The USDA’s weekly export sales report was out at 7:30 this morning, it looks a little disappointing for corn and wheat and maybe a touch friendly for beans. 

The outside market are mixed to a touch bearish so far today.  The $US is rallying sharply while equities/energies are mixed.  The Chinese markets are closed for the rest of the week (celebrating their spring festival) which could keep any news regarding bird flu (or changes in Chinese crush demand) quiet.  There are newspapers though that are reporting a fourth person has died from this “H7N9” virus and that bird sales are already down 30%.  This will be something to watch closely for folks still holding on to old crop soybeans.

Currently
Corn is 4 to 5 cents lower
Soybeans are 5 to 8 cents lower

5-Day Precip Map

Wednesday, April 3, 2013

A.M. Grain Market Commentary for 4/3/2013

AM Comments 04/03/13

Wednesday, April 3, 2013, 8:07 am
Submitted by: Dustin Weiner

Good morning!

Our markets are mixed this morning with corn trading steady to better while soybeans are weaker.  A new strain of bird flu has been discovered in China that has shaken up the soybean and soybean meal futures markets over there.  Vietnam has already banned imports of Chinese poultry because of it.  There are stories out there of a handful of deaths (up to 7) being blamed on this bird flu (I haven’t seen anything officially confirmed on that).  If true, and China’s demand for soybeans/soybean meal is lowered – this bearish tone in soybeans could hang around for a while.

Corn… with this large drop in flat price, there are reports out there that U.S. corn is now competitive in the export market – mainly China.  This “threat” of new demand could/should help the corn market form a bit of a bottom in here.  Make no mistake though, last week’s stocks report was a game changer for corn.  The USDA’s S&D report next week will be very interesting as we wait to see how the USDA projects demand for the rest of the crop year (and next). 

Weather… the 6-10 day forecast for the Midwest is kind of a mixed blessing as we are projected to see normal to above normal precipitation...  Good for the eventual recovery on the drought map, but not good for timely planting. 

Currently
Corn is 1 to 3 cents higher
Soybeans are 5 to 10 cents lower

Monday, April 1, 2013

Afternoon Grain Market Commentary for 4/1/2013

Afternoon Comments 4/1/2013

Monday, April 1, 2013, 3:32 pm
Submitted by: Kyle Lehman

Markets closed lower on follow through selling after Thursday’s report. Liquidation for the corn market continued today with funds sellers of 20k contracts which drove nearby corn to close 53 cents lower. End user pricing was heavy and kept corn from closing limit down for the 2nd consecutive day. Futures have lost 93 cents since the close on Wednesday of last week. As expected traders have started the debate over accuracy of the USDA figures. The talks now are how the USDA will reflect larger stocks in the April S&D. With the current figures ending stocks would increase roughly 300 mln. bushels. Feed will undoubtedly need to be reduced unless last year’s crop size was underestimated.
 
Soybeans closed 14 cents lower as funds were sellers of 6k contracts. Similar to corn soybean traders are scuffling over the USDA figures as export sales haven’t seemed to slow down as expected due to South America logistic issues. Export sales came in at 16.3 mln (well beyond pace to reach USDA figures) with 11.1 mln coming off the PNW pointed to China.

Weather will be a hot topic the next couple of weeks as we near the start of planting. The pattern shifted slightly from last week as the 6-10 day forecast is calling for slightly above normal temps with above normal precip.

A.M. Grain Market Commentary for 4/1/2013

AM Comments 04/01/13

Monday, April 1, 2013, 8:52 am
Submitted by: Dustin Weiner

Good morning!

Old crop corn expectedly took a beating last night, following through after Thursday’s limit down move – thanks to the USDA’s Quarterly Stocks Report.  You may notice that new crop corn is hovering around steady – Thursday’s stocks report was wildly bearish old crop, but the acreage report was neutral to new crop prices which is helping dec corn stay afloat.

Traders are now turning their eyes to weather.  So far today, it appears to be a mixed bag across the belt.  For the bears: temps in the short term are expected to warm up a bit with some small precip mixed in, which would help get us on the path to planting on time.  For the bulls: the extended forecasts are showing above normal precipitation and below normal temps – not ideal for planting.  As these forecasts change, so will your new crop corn price.  These next few weeks could be pretty choppy…

Currently
Corn is down 30 cents
Soybeans are down 10 cents