March 1, Dear Subscriber:

Transcription

1 March 1, 2013 Dear Subscriber: Hard to believe but we are just five weeks or so away from beginning to plant corn in the mid midwest. Corn planting could get underway now in the deep south --- BUT in many places it is too dry to run the planters. We will be watching the weather closely over the next few weeks because often the early March time frame provides a bench mark for the type of weather we can expect during spring planting season. With old crop corn stocks extremely tight (and a portion of it waiting blending due to afltoxin issues) early planting is a must. The All Day Ag Outlook Meeting is this upcoming Tuesday, March 5 th. The event is a sell out and we will not have tickets available for sale at the door and a ticket is needed for entry into the event. 1

2 Todd and Dave thanks you for your support. There are other outlook panels on our calendar as well. We ve got that list right here: Date March 4, 2013 March 5, 2013 March 6, 2013 March 11, 2013 March 13, 2013 Location ISU Bone Center Normal, Illinois The Beef House Covington, IN University of Illinois Extension Building, Fairgrounds, Lincoln, IL Champaign County Farm Bureau, Champaign, IL Celebrations, LaSalle, IL Calendar of Upcoming Outlook Meetings Time (Central except where noted) ALL DAY AG OUTLOOK 7:00 p.m. 7:00 p.m. 6:00 p.m. Light Snacks 6:30 p.m. Outlook Panel Panelists/Speakers Todd Gleason, Soybean Panel, Livestock Issues, Cash Grain Panel, Murray Wise, John Bondurant, Corn Panel, Gary Schnitkey, University of Illinois Pete Manhart, Bates Commodities Chip Nellinger, Blue Reef Agri-Marketing Jacquie Voeks, Stewart Peterson Group, Champaign, Illinois Mike Zuzolo, Global Commodity Analytics, Lafayette, Indiana Curt Kimmel, Bates Commodities, Normal, IL Sponsor Illinois Soybean Association ilsoy.org WILLAg Logan County Farm Bureau Champaign County Corn and Soybean Marketing Club LaSalle County Stockmen 2

3 University of Illinois ag economist Darrel Good reviews USDA s projections for corn and soybeans. Darrel writes: Based on a model estimated over the period 1988 through 2012, the USDA projects the U.S. average corn yield at bushels per acre. The model incorporates trend, planting progress, and summer weather variables to explain average yield. The 2013 projection assumes normal planting progress, no extreme June dryness, and average summer weather. The forecast is higher than most other forecasts, including ours. Using a longer time period, and 3

4 the application of a different weather model, our analysis points to a 2013 yield near 160 bushels. For soybeans, the USDA projects planted and harvested acreage to increase by a very modest 300,000 and 500,000 acres, respectively. Based on a model similar to the one used for corn, the U.S. average yield is projected at 44.5 bushels per acre, resulting in a crop of billion bushels. That would be 390 million bushels larger than the 2012 crop and 46 million larger than the record crop of Using a longer time period and a different weather model, our expectation would be for an average yield of 43.8 bushels and a crop near billion bushels. The early USDA projections for the marketing year are wellreasoned and represent a useful starting point. Our projections differ only slightly. Larger year-ending stocks and a marketing year average price near $4.50 for corn may result from a crop of 14.5 billion bushels. Producers appear to have been reluctant to take advantage of the high pre-harvest prices available early in the year. In contrast, our expectations would be for a slightly smaller soybean crop, stronger domestic soybean oil demand, and a marketing year average farm price of soybeans near $ To read Darrel s full report go to: tml USDA reports this week s corn export sales at 20.2 million bushels (11.9 this year, 8.3 next year). Trade guesses were for 11.8 to 18.7 million bushels. On the year, total commitments for corn are million bushels vs million bushels a year ago at this time. 4

5 Weekly Corn as of February 21, 2013 Chart Courtesy of USDA Foreign Ag Service For information on basis in Illinois this past week go to: The Iowa basis report is at: In Friday afternoon s commitments of traders report for the week ending February 26 non-commercials decreased its net long position. Noncommercials were long 334,634 contracts, a decrease of 29,072 contracts, and were short 196,001 contracts, an increase of 11,809 contracts from the previous reporting period. Meanwhile in futures and options combined non-commercial traders decreased its net long position for the period ending February 26. Noncommercials were long 325,308 combined future and option contracts, a decrease of 5,134 combined future and option contracts and short 214,070 contracts, an increase of 6,322 combined future and option contracts from the previous reporting period. 5

6 The CFTC Supplemental Report for February 26 indicated the following combined future/options positions (INDEX ONLY): Long Short Long Change from Previous Report Index Traders 425,347 43,072-1, Short Change from Previous Report USDA reports this week s soybean export sales at 43.0 million bushels (25.3 this year, 17.7 next year). The trade was anticipating sales of 19.3 to 34.0 million bushels. On the year, total commitments for soybeans are million bushels vs million bushels a year ago at this time. Weekly Soybeans as of February 21, 2013 Chart Courtesy of USDA Foreign Ag Service 6

7 In Friday afternoon s commitments of traders report for the week ending February 26, non-commercials increased its net long position. Noncommercials were long 194,318 contracts, a decrease of 2,543 contracts and were short 66,063 contracts, a decrease of 19,090 contracts from the previous reporting period. Meanwhile in futures and options combined non-commercial traders increased its net long position for the period ending February 26. Noncommercials were long 194,449 combined future and option contracts, a decrease of 5,433 contracts and short 47,110 contracts, a decrease of 13,079 combined future and option contracts from the previous reporting period. The CFTC Supplemental Report for February 26 indicated the following combined future/options positions (INDEX ONLY): Long Short Long Change from Previous Report Short Change from Previous Report Index Traders 144,513 27,864-1,046-22,445 USDA reports this week s wheat export sales at 19.3 million bushels (13.7 this year, 5.6 next year). The trade was anticipating wheat sales between 20.2 million bushels and 26.6 million bushels. On the marketing year wheat sales have totaled million bushels compared with million bushels a year ago at this time. 7

8 Weekly Wheat as of February 21, 2013 Chart Courtesy of USDA Foreign Ag Service In Friday afternoon s commitment of traders report for the week ending February 26 non-commercial traders decreased its net short position. Non-commercials were long 107,337 combined future and option contracts, an increase of 567 contacts and short 140,422 contracts, a decrease of 2,211 combined future and option contracts from the previous reporting period. The CFTC Supplemental Report for February 26 indicated the following combined future/options positions (INDEX ONLY): Long Short Long Change from Previous Report Short Change from Previous Report Index Traders 173,178 27,703-3,501-3,754 8

9 WEATHER Here is World Weather Inc. Drew Lerner on the two week outlook: BRAZIL A favorable mix of rain and sunshine will occur in most of Brazil during the coming ten days. The far northeast will see the least frequent and least significant rainfall leaving the region in a hydrologic drought. Some of the crops in the region from northeastern Minas Gerais and Espirito Santo to eastern Bahia will continue stressed in the lack of precipitation, but this region produces more cotton, rice, sugarcane and coffee than it does corn or soybeans

10 The favorable mix of weather in center west, center south and far southern Brazil will help maintain a very good outlook for second season corn as well as supporting the further development of main season corn and soybeans. Harvest progress will continue to advance faster than usual. Sao Paulo is the only state behind in harvest progress relative to the five year average and as of a week ago it was only 2% off the normal pace. All other states are still far ahead of the usual harvest pace. Temperatures will remain seasonable during the next ten days. Highs will often be in the 80s and lower 90s with a few middle and upper 70s in the milder locations in the southeast. A few extreme highs in the middle and upper 90s will also occur in the drier areas of the northeast. Lowest temperatures at night will mostly be in the 60s and lower 70s with a few upper 50s in the far south on an infrequent basis. ARGENTINA Rain will continue to fall today and early Saturday morning over a large part of southern and eastern Argentina. Rain totals of 0.60 to 1.50 inches will result in most of Buenos Aires, Entre Rios and eastern Santa Fe. A few local totals to 3.00 inches will be possible favoring east-central La Pampa and southwestern Buenos Aires. Entre Rios, southeastern Santa Fe and northeastern Buenos Aires will be another area favored for some totals near and above 2.00 inches. Rainfall in the remainder of the nation will range from a few hundredths of an inch to 0.60 inch with the driest conditions from western Cordoba to Santiago del Estero and from Chaco into northern Santa Fe. Sunday through Tuesday will be mostly dry and a weak weather disturbance is still expected late Tuesday night into Wednesday impacting little more than 45% of the nation with light rainfall. Another period of net drying will occur Thursday of next week through March 10 and then scattered showers and thunderstorms will be possible from March 11 through March 15. The precipitation near mid-month is expected to be relatively light and somewhat disorganized benefiting some areas more than others. After today s rainfall the region of driest conditions in Argentina will have further shrunk to the region from southernmost Cordoba into northwestern most Buenos Aires. Most other areas will receive enough rain to support late season crop development. The drier biased conditions that will occur often in the coming ten days will bring back some of the dryness in the southwest unless greater rainfall than expected occurs later in the week next week. Timely rainfall will be needed in March to maintain the best conditions for developing soybeans, sorghum and late corn. Subsoil moisture will carry 10

11 most crops through the drier period, but some stress is still expected in the old favored dry region of the southwest where today s rainfall will be welcome, but not quite enough to carry crops for very long without additional rain. Temperatures will trend cooler behind today s rain event and the milder conditions will prevail through the weekend and into Monday before warming occurs next week. High temperatures in the 70s with a few upper 60s will impact Buenos Aires, La Pampa and a few neighboring areas during the weekend while northern Argentina sees highs in the 80s with a few lower 90s. Most of next week will generate highs in the middle 70s to middle 80s south and the middle 80s through the middle 90s in the north. Most low temperatures will be in the 40s and 50s south and 50s and 60s north. Panelists: Matt Bennett, TGM - Windsor, Illinois Bill Mayer, Strategic Farm Marketing - Champaign, Illinois Wayne Nelson, L&M Commodities - New Market, Indiana Guest: Gary Schnitkey, Farm Management Specialist - University of Illinois Crop Insurance Decisions You can listen to Commodity Week each Saturday morning at 11:30 a.m. central time on AM-580 or click on the following link after 6:00 p.m. Friday evenings and catch the show on our website: Broadband MP3: 11

12 Dial Up MP3: Weekly Continuation Chart 4, 2009 March 1, 2013 Commodity Week Week Week Change from High Low Settle Previous Week Mar Wheat 718 3/ / /4 down 1 3/4 Jul Wheat 722 1/4 down 1 1/4 Mar Corn 726 1/ / /4 up 34 Dec 13 Corn 556 3/4 up 4 Mar Soybeans / / /2 up 3 1/4 Nov 13 Soybeans /4 down 5 1/2 Apr Live Cattle / up 172 1/2 Apr Lean Hogs / /2 down 52 1/2 Mar Oats 402 1/2 up 14 1/2 12

13 AM-580 Daily Agricultural Programming Schedule Monday Friday (all times central) 8:49 a.m. $*Pre-Opening Commodity Market Report 9:49 a.m. $*Opening Commodity Market Report 10:59 a.m. Commodity Market Price Update 11:59 a.m. Commodity Market Price Update 12:55 p.m. *Midday Market Analysis with Sue Martin 1:50 p.m. CBOT & CME Settlement Prices 2:06-2:36 p.m. $*Closing Market Report o 2:08 *Futures Analysis o 2:20 - *Agricultural News o 2:25 - *Cash Grain Analysis or Energy Analysis o 2:32 *Agricultural Weather Analysis Saturday 6:30 a.m. - $* Commodity Week 11:30 a.m. $*Commodity Week *Available on the website for on demand listening! $Available via podcast. 13