Posted in Blog, Grain
Extreme spring weather is not shaking up the market in a positive way. With rainfall coming in less than first expected, the market looks for planting to get a good start. Fieldwork around here has not really started, but south of here has and fertilizer applied.
Markets are taking a break on Good Friday holiday and trading will resume Sunday night. High level talks are scheduled for last week of April in China and then Washington DC in early May. There is still hope that a deal will be reached and signed by the end of May or early June.
Corn continues to grind lower with lack of news and farmer selling. Ethanol production saw an increase over last week by 295 million gallons. Ethanol is currently outpacing seasonal averages and USDA estimates. Ethanol stocks are still 6.2% above levels at this same time last year. February the U.S. exported 114 million gallons below last year by 48%. The normal buyers are still buying Brazil, Canada and India. U.S. corn is still 30-35 cents over priced against Brazilian corn.
Funds continue to take a shorter position in beans. Argentina’s government estimated their soybean crop at just shy of 56 million metric tons vs. the USDA at 55 million metric tons. China is thought to have most of their beans bought for May but only 30% for June.
Start looking at corn numbers for October/November 2020. Spring 2021 offers some good numbers out there. Make sure to talk to one of us and review your offers ahead of planting. Have a safe and great planting season.
Posted in Blog, Grain
Trade optimism and a slow start to planting gave headlines a friendly tone to start the week but a drier Western Corn Belt outlook tempered the anticipation of higher prices. Monday’s U.S. corn planting was at 3% vs the expected 5% and vs the 5-year average of 5%. Spring wheat planting was at 2% vs the expected 4%. Next weeks progress is already expected to get further behind the 5-year average.
A statement from Treasury Secretary Steve Mnuchin and U.S. Trade Representative Robert Lighthizer that the U.S. and China are “getting close to the final round of concluding issues” continue to give optimism to an outcome while many start to speculate what could be involved in such a deal given the state of the Chinese swine industry as it relates to meat (including beef and poultry) as part of the deal. China was on the export shipments list for the week ending April 11 with two cargoes of soybeans 4.8 million bushels. Soybean export inspections in yesterday’s report was on the low end of expectations at 460 tmt, down from last week’s 888tmt.
Grain markets will be closed this Friday for Good Friday.
Posted in Blog, Grain
Just another strange week here in the great state of Wisconsin. Here in the central part of the state we have more snow/freezing rain that is not welcome this time of year. This week in the grain world not much is exciting. The WASDE Report was released leaving prices in approximately the same range we have been seeing for a week now.
Corn is trading a smidge lower due to loss of export sales. Corn harvest in South America is still plugging along. It looks like Argentina has raised the estimated production again on corn and beans. Ethanol margins are getting tighter due to some plants shut down due to flooding.
Soybeans are also lower this morning. It seems that the market is getting more skeptical on an agreement between the US and China. Along with no deal there also has been a cancellation of the World Pork Expo in Des Moines IA. This could potentially affect the bean market, I would think new relationships are found during such world events.
Wheat is still holding somewhat steady. Looks like exports are neutral for the US. European futures are a tad higher. RJO reported that the wheat market could start to stabilize in the next coming months.
While prices are not where most farmers would like, now is a great time to try Premium Offer Contracts on old crop grain. If you look further in to the differed months prices start to get stronger, so forward contracting in 2020 or Price Builder Bonus contracts can help farmers capture the carry in the market. My final tip for these markets is selling the calendar not just the spikes. When selling the calendar one can hopefully beef up the average price per bushel rather than missing out on the short window of a rally.
Have a great day, spring should be arriving soon!
Posted in Blog, Grain
Markets are trading mixed following the release of the USDA S/D report where minor changes were made. The report was slightly bearish compared with average trade expectations.
Ethanol, feed and residual and export forecasts were lowered in the report. As a result, ending stocks forecast was raised by 200 million bushels. Global ending stocks were raised about 5.5 million tonnes. With ending stocks raised again corn could have a hard time rallying even with weather issues. Some are questioning lowering the feed use when hog, cattle and poultry numbers have been increasing.
Soybean stocks were lowered by five million bushels to 895 million bushels, which was below trade expectations. USDA made no adjustments to exports or crush. Brazil’s production was raised but kept Argentina’s production unchanged.
Wheat exports were cut 20 million bushels and feed and residual use was cut 10 million bushels. Endings stocks are forecast at 1,087 million bushels.
So, what is the game plan now with all this bearish news. The markets focus will be on planted acres and weather. We would encourage you to stay focused on your marketing plans and update them as the planting and growing season moves on.
Get your offers working for you while you are getting your crop in the ground. Your grain marketing specialists are ready to help get your old and new crop sold. Please take the time to be safe this spring—No one can take your place.
Posted in Blog, Grain
Markets are continuing to slowly climb back from last Friday’s report. This morning’s exports were better than expected for beans and wheat, but disappointing on corn. The USDA announced 72.4 million bushels of bean exports, 25.9 million bushels of wheat, and 21.2 million bushels of corn to be exported.
The five-day forecast shows rain for 95% of the Midwest with low pressure systems moving in from the Plaines. Temperatures should be around average for the rest of the week, but a cold snap will cool things down at the end of next week. Field work will most likely be slow until the fields get a chance to dry up.
In trade news today, India is allowing 100K tons of non-GMO corn to be imported at 15% tariff compared to their normal 60% import tax. US negotiators met with Chinese officials on Wednesday, and President Trump is expected to host Vice Premier Liu this afternoon in The White House. Sources have indicated that a deal could be close that would have the Chinese buying a trillion dollars of US commodities between now and 2025. Have your orders in working, especially before you get too busy in the fields, so that you can take advantage of any trade talk rallies that may be short lived.
As we all try to stay optimistic about a trade deal, remember that a good marketing plan also takes into account the calendar. While we will continue to hope for a bounce in markets, make realistic decisions in your sales to manage your risk.
Have a great day!
Posted in Blog, Grain
The biggest news in the market today is the March USDA planting intentions and quarterly stocks report that was released last Friday. The report caught some by surprise with a bearish bias in the numbers, especially in corn. Corn closed down 17 ½ cents on the day. This is the largest single down day since July 12th, 2017 when nearby corn closed 16 cents in one session.
The USDA Prospective Planting report indicated 92.8 million acres of corn to be planted this spring; surpassing the highest trade guess and up 3.7 million acres from last year. March 1st, corn stocks were 8.6 billion bushels vs 8.3 billion estimated and 8.89 billion last March. This is a 290-million-bushel decline but nearly 300 million higher than the pre-report estimates.
One thing to remember is the surveys were done before much of the major flooding so it will be interesting to see what does happen. Now that this report has been released the focus will move to the weather. The US planting season as well as the pollination of Brazil’s safrinha corn crop. Also, if the fund traders find a reason to cover short positions, it could drive a decent rally given the huge size of their position.
The soybean story was a bit more positive because the increased corn acres means less soybean acres to be planted. The problem is that even with less acres the story of too many soybeans in inventory really doesn’t change much. Also, earlier last week soybeans had already taken a hard hit with large sales coming from the South American growers on weaker currencies in Brazil and Argentina. Growers there sell soybeans in US dollars, so when their currencies fall vs. the dollar, they get more money. Brazil’s currency is down 8% compared to the US dollar in the last 30 days.
Expected planted acres of soybeans in the US was reported at 84.6 million down 4.6 million from last year. The average trade estimate was 86.2 million acres. With the later spring planting season and flooding there could be more soybean acres planted and less corn than what was reported at survey time. Soybean stocks were reported at 2.716 billion bushels up 600 million form last year and 33 million than the average guess. On-farm stocks were 1.27 billion bushels, up a significant 49% from last year. The story here is a lot of soybeans and they are on the farm.
While these numbers were not what the market wanted to create higher prices there most likely will still be opportunities. One thing to keep in mind in our marketing plans that the calendar does dictate some marketing as well. As we move further along, and you still have a bunch of old crop to sell and haven’t done much new crop either it probably makes sense to get some sold. It is probably a good time before planting starts to revisit your marketing plan and targets or at least put a plan together. Let us know how we can help with that.
Posted in Animal Nutrition, Blog
While devastating flooding takes place in the Midwest it has a ripple effect on the market. Full losses in livestock and grain are not yet known—and could take even a year to uncover—but there are key factors to watch in the market even now.
- Ethanol: “Pay attention to what’s taking place with ethanol capacity,” says Angie Setzer, vice president of grain for Citizens LLC in Michigan. “A good percent of production is offline or damaged in the short-term and because of that we did see ethanol futures jump mid-week and help margins for plants not effected.”
- Logistics: “They can’t ship grain if rail is damaged,” Setzer says. “There are significant logistic disruptions and how that plays out is yet to be seen and it could affect basis. The Mississippi River is expected to see major flooding and it’s a significant grain mover—what does that mean for export ability.”
- Destroyed stored grain: “The million-dollar question is how much grain storage is impacted and what does that mean,” she says. “You can’t blend off flooded grain. Nebraska stored grain in bags at record levels, how much of that has been lost? Nebraska is estimating $440 million in crop losses.”
While the weather might not have a big effect on the markets yet, it likely will.
Posted in Blog, Verity Business Solutions
As with every year, the excitement for planting season begins to build in March. With planting right around the corner, farmers are finalizing their 2019 crop plans. The goal of every farmer is to get the most economical yield possible from their crop. Most of the time, the financial woes of the previous year are forgotten with the optimism for the new season. However, because of the current state of the agricultural economy this year may be a little different. Over the past few years there has been a significant reduction in the availability of capital. Some farmers are realizing that they may not have the funds available to obtain the most profitable crop. By utilizing your Ag supplier and the special financing programs they can provide; will be of value to you and your business.
Verity Business Solutions, LLC is here to help. Verity has partnered with Landmark Services Cooperative to provide crop operating loans that will help you maximize every acre. Because of our relationship with Landmark we understand production agriculture. Verity understands the fact that sometimes things come up in-season that will make the difference between a good year and a great year. Landmark and Verity are committed to provide our members with the competitive advantage. By working together, it sets them apart from their competition to provide a wide array of financing options.
Verity currently provides Landmark Services Cooperative members with Crop Operating, Machinery, and Real Estate loans, along with Leasing and Crop Insurance. Whether it is helping you determine your breakeven or providing a Crop Operating loan to get that extra 10 bushels, we are here to provide solutions. Whether you are a dairy producer or a crop producer, Verity along with Landmark have options along with programs to fit your needs.
Posted in Animal Nutrition, Blog
Milk prices are forecasted to be about $0.60 per cwt higher than originally projected by USDA in the March World Agriculture Supply and Demand Estimates report. The all milk price has been elevated from an average of $17.00 to $17.60 per cwt. The price was elevated after USDA projected less milk to be produced.
Exports of U.S. dairy were up 9% by volume in 2018 compared to the previous year, setting a record according to the U.S. Dairy Export Council (USDEC). The sales value was up 2% from 2017 reaching $5.6 billion and putting the U.S. as the largest exporter of cheese in the world.
Despite those gains exports end the year on bad note. In December, sales volume declined 21% and the value of sales fell 9%. November saw sales volume was drop 12%, while fourth quarter 2018 sales volumes ended the year down 11%.
Posted in Blog, Grain
Yesterday saw heavy fund selling that pushed the markets sharply lower with beans leading the way! Corn and wheat slide lower following the beans as the funds baled and went to the short side of the market. The Argentine Peso is at a record low vs. the dollar. The fall in the South American currencies has the effect of raising the price of soybeans to their farmers since world soybeans are priced in dollars.
Weekly ethanol production fell by 29,000 bpd to 975,000 bpd. Ethanol stocks were unchanged at 24.4 million barrels, but still an all-time record. Margins fell 4 cents/gallon to a positive 3 cents/gallon. Weekly production this marketing year is down 1.7% from a year ago levels. Many anticipate a cut in corn for ethanol usage on future S/D balance sheets.
High-level U.S. officials, including U.S. Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin, are headed to China today to resume trade negotiations between the two countries. Earlier this week, Lighthizer told reporters: “If there’s a great deal to be gotten, we’ll get it. If not, we’ll find another plan.” And President Donald Trump told Republican lawmakers on Tuesday that the U.S. will settle for nothing short of an “excellent deal.”
Corn prices dropped yesterday around 1% on technical selling and positioning ahead of Friday’s USDA reports. May and July futures each lost 3.5 cents to close at $3.73 and $3.83.
Soybean prices yesterday for May and July futures both tumbled 13.25 cents lower to land at $8.87 and $9.01.
Wheat prices firmed slightly yesterday on general U.S. export optimism after Russian supplies have tightened somewhat. May Chicago SRW futures ticked 0.25 cents higher to $4.69.
This year has seen a record amount of marketing plans put together for our customers by the grain marketing staff at Landmark. We are the best at what we do, so give one of us a call to help put a plan together for your specific operation and financial needs.
Think spring and be safe out there!