June 2, Today s Newsletter Market Situation Crop Progress 1 Corn Use 2 Outside Markets 3 Marketing Strategies Corn Marketing Plan 5 Upcoming Reports/Events 6 Market Situation Crop Progress. This afternoon s Crop Progress report from USDA showed 95% of the U.S. corn crop is in the ground. This is just below the 30-year average of 96% and ahead of last year s 90%. U.S. Corn Planting Progress % Planted, 1980- % 100 90 80 70 60 50 40 30 20 10 0 13 14 15 16 17 18 19 20 21 22 23 Week High Low Average Today s report also contained the first condition rating of the corn crop. No U.S. corn is rated as very poor and 76% is good or better. The corn crop condition index is 387 compared to an average early season condition rating of 370. U.S. Corn Crop Condition Ratings 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% USDA May:165.3 Trend:159.2 500 450 400 350 300 250 200 150 100 Very Poor Poor Fair Good Excellent Average Source: Crop Progress, USDA 1
June 2, Corn Use. Ethanol production in the / corn marketing year continues to outpace last year and the most recent 3-year average. The Energy Information Administration reports that for the week ending May 23 rd daily ethanol production was 38.934 million gallons. Since the first of September, average production has been 37.790 million gallons per day. That compares to 34.819 million gallons per day in 2012/ and 36.556 million gallons per day for the 3-year average. Again using corn marketing year averages for comparison, ethanol stock levels are 11% below last year and 18% below 2011/2012. U.S. Ethanol Production Million gallons per day 41 / daily average = 37.790 mil gal per day Implies use of 4,926 mil bu of corn (2.8 gal/bu) May USDA estimate = 5,050 mil bu 39 37 35 33 31 13/14 average to12/13: +8.5% 13/14 average to 3-yr: +3.4% 29 27 25 / 2012/ 3-year Avg Energy Information Administration, Weekly Petroleum Status Report, data for week ending 05/23/ Ethanol conversion rate, Agricultural Marketing Resource Center, Iowa State University U.S. Weekly Ethanol Stocks Million gallons 1,000 950 900 850 800 750 700 650 600 550 500 Sep 06, Oct 06, Nov 06, Dec 06, Jan 06, 13/14 MY average of 676 mil gal to12/13 average: -11% 13/14 MY average to 11/12 average: -18% Feb 06, Mar 06, Apr 06, May 06, 2011/12 2012/13 /14 Jun 06, Jul 06, Energy Information Administration, Weekly Petroleum Status Report, data for week ending 05/23/ Aug 06, 2
June 2, Outside Markets. The Commerce Department reported last week that U.S. GDP contracted in the first quarter of by $40 billion or 1%. Consumer expenditures, which account for about 70% of the U.S. economy increased $83 billion (+3%), but this was offset by a reduction in business capital spending and inventories of $81 billion, a $6 billion decrease in government spending, and a $36 billion increase in imports over exports. Expectations are for a rebound in GDP in the 2 nd quarter back up to 3.5% growth. Billions of constant 2009 dollars GDP, % change annual basis 6% 4% 2% 0% -2% -4% -6% -8% 2004-01-01 2004-04-01 2004-07-01 2004-10-01 2005-01-01 2005-04-01 2005-07-01 2005-10-01 2006-01-01 2006-04-01 2006-07-01 2006-10-01 2007-01-01 2007-04-01 2007-07-01 2007-10-01 2008-01-01 2008-04-01 2008-07-01 2008-10-01 2009-01-01 2009-04-01 2009-07-01 2009-10-01 2010-01-01 2010-04-01 2010-07-01 2010-10-01 2011-01-01 2011-04-01 2011-07-01 2011-10-01 2012-01-01 2012-04-01 2012-07-01 2012-10-01-01-01-04-01-07-01-10-01-01-01-10% Source: U.S. Bureau of Economic Analysis and Federal Reserve Bank of St. Louis, updated May 29, Look for Friday s employment report to show an increase in jobs of 215,000 to 220,000. The unemployment rate is expected to increase to 6.5% from 6.3% in April as more persons entered the workforce. 3
June 2, Net Percentage II Qtr Tuesday April 1 Monday June 2 Change Change Dow Jones Ind. Avg. 16,532.61 16,743.06 210.45 1.27% CRB Commodity Index 301.86 305.41 3.55 1.18% Jul 14 Crude Oil 98.18 102.30 4.12 4.20% Jul 14 Copper 3.0310 3.1675 0.1365 4.50% Sep 14 Dollar Index 80.409 80.790 0.381 0.47% Jul 14 Corn 5.1250 4.6550-0.4700-9.17% Sep 14 Corn 5.0850 4.5925-0.4925-9.69% Dec 14 Corn 5.0550 4.5850-0.4700-9.30% 4
June 2, Marketing Strategies Corn Marketing Plan. I am 40% priced on feed grain production. My next sales objective is this month around the time of the Acreage and Grain Stocks reports. The corn market has been under pressure with a normal planting pace, good crop conditions, and a favorable weather outlook (see today s Wheat Outlook for specific weather forecasts). December Corn Futures and Marketing Plan /bu 600 580 560 540 20% 20% 20% 20% 20% South American crop conditions Battle for Acres Planting Intentions Planting Intentions Grain Stocks Early season crop conditions Weather outlook Acreage Report/ Grain Stocks Weather Tassel and August Crop Report Cash sales at harvest 520 500 480 460 440 420 March 13 Sold 20% at 484 May 13 Sold 20% at 495 400 9/3/ 9/12/ 9/23/ 10/2/ 10/11/ 10/22/ 10/31/ 11/11/ 11/20/ 12/2/ 12/11/ 12/20/ 1/2/ 1/13/ 1/22/ 1/31/ 2/11/ 2/21/ 3/4/ 3/13/ 3/24/ 4/2/ 4/11/ 4/23/ 5/2/ 5/13/ 5/22/ 6/3/ 6/10/ 6/17/ 6/24/ 7/1/ 7/8/ 7/15/ 7/22/ 7/29/ 8/5/ 8/12/ 8/19/ 8/26/ 9/2/ 9/9/ 9/16/ 9/23/ 9/30/ 10/7/ 10/14/ 10/21/ 10/28/ 11/4/ 11/11/ 11/18/ 11/25/ 12/2/ 12/9/ 5
June 2, Upcoming Reports/Events. June 6 Employment Situation for May June 9 Crop Progress June 10 Short-term Energy Outlook June 11 WASDE June 16 Crop Progress June 17 Consumer Price Index June 20 Cattle on Feed June 23 Crop Progress June 27 Quarterly Hogs and Pigs report June 30 Crop Progress Acreage Grain Stocks Mark Welch, Texas A&M AgriLife Extension Economist 600 John Kimbrough Blvd, Suite 335 College Station, Texas 77843 Tel. (979)845-8011 Fax. (979)845-4906 JMWelch@tamu.edu The opinions and recommendations expressed are solely those of the author and are intended for educational purposes only as part of the Texas A&M AgriLife Extension Service. The author and Texas A&M AgriLife Extension Service assume no liability for the use of this newsletter. Educational programs of the Texas A&M AgriLife Service are open to all people without regard to race, color, sex, disability, religion, age, or national origin. The Texas A&M University System, U.S. Department of Agriculture, and the County Commissioners Courts of Texas Cooperating 6