Information about grain markets and info to help producers to market crops. See how various grain marketing strategies can effect ones average price. We will be posting various potential trade and option strategies along with marketing decisions made on our mock farms.
Wednesday, May 1, 2013
Opening Comments - Wheat tour Recap Day 1
Markets continued yesterdays late selloff in the overnight
session; with soybeans leading the pressure down.
In the overnight session corn was off 7-9 cents, soybeans
were down 32 on the May contract, July beans were off 20 cents, November
soybeans were down 12 cents a bushel, KC wheat was off about a dime, MPLS wheat
off about 11, and CBOT wheat off 11 cents.
Outside markets look like a little risk off day and that might have
helped pressure our grains a little last night.
Presently DOW futures are pointing to a slightly lower start, crude is
off about 2.50 a barrel, gold is off about 14 bucks an ounce, and the US dollar
is weaker. The weaker dollar should help
out our grains but it really hasn’t had the correlation as of late that it used
First day of the wheat tour came off as friendly with one
leg about 10 bushels an acre less than last year, CO about 14 million bushels less
than last year, and 11 bushels an acre less in NE. Today is expected to show worse results. The tweet I seen this a.m. said “Field
1. Outside of Goodman. Visual yield 12. pic.twitter.com/cZ1MjHFBqL”
More info on day one of the door is below at bottom of
Looks like some of the pressure in soybeans is coming
from economic data out of China with their PMI coming in disappointing at 50.6
versus 50.9 last month. This leads to
questions about their demand for grains.
Latest forecasts show that much of the corn belt to get
hit over the next 72 hours. I did hear
of some snow hitting parts of eastern South Dakota overnight and some talk yesterday
was off a foot or so of snow in Iowa.
Deferred forecasts do look like they might have a window
to get something done as many of the 6-10 and later forecasts are calling for
below normal moisture now; but some areas are still cool. We should stay rather choppy and volatile as
more forecasts come out. Bottom line is
weather could be causing some acres to shift out of corn into either another
crop or possibly even prevent planting.
There is also a good relationship between yield and planting. But we need to keep in mind that 2009 which
was one of the best yielding years ever also started late. Weather in June/July/August is really what
should make or break this crop.
Sounds like another freeze could hit much of the HRW belt
tonight through Friday. One thing to keep in mind is that so far the
HRW has been hit with a couple different freeze events; but yet the tour isn’t
finding much freeze damage more drought damage than anything. The actual freeze damage might not show up
until the combines hit.
We will have more wheat tour info as the day goes along and
at 9:30 ethanol numbers will be out.
Other than that we should trade weather and maybe some
technical trading. One thing that we are
really still missing for our markets to take off is demand and the headline to
get the funds in their buying. For us to
have a true bull market we need to have solid demand and good money flowing
coming into our markets. Without them
longer term rallies are probably suppose to be sold or used to take some risk
off the table. Outside markets should
continue to make one nervous and our job over the next year or so is still
going to be finding some demand; more year over year demand then we have ever
done. Keep in mind that pro’s and
advisors are probably going to be selling the rallies until something changes
with demand or the crop prospects really get ugly.
Please give us a call if there is anything we can do for
Below is a forward from one of our buyers that is one the
crop tour. I got this late last night
Feel free – it should be coming out in reports tomorrow also.
Jay A. Johnson
VP of Purchasing and Quality
From: CO-Pierre, Jeremey Frost [mailto:Jeremey.Frost@chsinc.com] Sent: Tuesday, April 30, 2013 10:29 PM To: Jay Johnson Subject: Re: winter wheat tour - saw your bullish report
for update. Do care if I share this with my producers/contacts.
communication may contain privileged and/or confidential information and is
intended only for the use of the individual or entity to which it is
addressed. If the reader of this message is not the intended
recipient, you are hereby notified that any unauthorized dissemination,
distribution, and/or use of this communication is strictly
prohibited. This communication makes no representation or warranty
regarding the correctness of any information contained herein, or the
appropriateness of any transaction for any person. Nothing herein shall
be construed as a recommendation to buy or sell any commodity contract.
There is a risk of loss when trading commodity futures or options.
first day of the winter wheat tour is completed and despite the tweets that
went out today from different sources on the tour that sent the wheat market on
the rise - the results were not too bad for the 2013 crop. I was on
the yellow route that went through the Northern 3rd of the
state. Our group estimated 43 bushels per acre for the day – which ended
up being the average for those touring the Northern ½ of the state along with
groups that also went into Southern Nebraska. The central part of Kansas
and western Kansas was in tougher shape – but yields in those areas are still
in the teens and 20’s for averages and there is a sentiment that farmers will
not plow them up as they want ground cover to avoid any potential soil erosion
– therefore adding to the ending stocks versus just taking an insurance payment
for a total crop loss. The day’s average of 43.8 bushels per acre for the
entire group (20 cars) is the 4th highest 1st day total
in the past 8 years. Larger than 2009, 2010 and 2011 – so despite the
concerns you have heard in the media – the first day numbers were decent.
Our group also stopped by local elevators in Lucas and Zurich, KS and both
indicated they expect a record wheat crop due to the acres that were planted
this past fall. The wheat is a couple weeks behind – but with moisture
they should have a good crop.
from Colorado were also present. They reported they anticipate 20%
abandonment of acres in Colorado – mostly south of the I-70 line. They
felt there was real good potential in the northern portion of the state.
They estimated yields in Colorado to be 34 bushels per acre for the 11 stops
they had on their way to Colby, KS. They also anticipate their crop is
about 3 weeks behind schedule.
wheat staff reported on the condition in Nebraska and they anticipate Nebraska
taking a big hit. In the Chappelle area (southwest) crop insurance agents
projected a yield of 3 bushels to the acre for a few growers. In the
panhandle they anticipate 10 to 50 bushels per acre – depending on moisture
that was real hit and miss out there. In the southern part of the state
some areas received adequate moisture where other areas did not and about 10%
of the crop did not emerge. They anticipate statewide yields to average
in the 30’s per bushel.
is anticipated to be tougher news as the southwest portion of Kansas is in
tough shape due to the drought and some freeze damage – but we will see in
person tomorrow. It is also supposed to snow and sleet tomorrow – so the
moisture will be good for the crop.