Tuesday, April 30, 2013

Closing Comments - Twitter wheat tour info 4-30-2013


Markets closed mixed in a choppy somewhat volatile session as we continue to trade weather.

July corn closed down a dime a bushel, new crop December corn was off 3 cents, KC wheat was up 14, MPLS wheat was up 3, CBOT wheat was up 14-15, July soybeans were off a dime, November soybeans were down 6 cents, the US dollar is under pressure off about 400 points with the cash index at 81.73, crude is off about a buck and a half, and gold was up about 9 bucks an ounce.

Very choppy day; at one time in the night session corn was up about a dime and with old crop closing off a dime we had a good twenty cent range.  New crop had about a 15 cent trading range for corn.  The wheat market had even more volatility; at one time early in the session KC wheat was off about a dime as the early reports from the crop tour where decent.  Then around 9:30-10:00 we had got to about break even and within another hour or so we were up about 20 cents giving us a 33 cent trading range from 8:30 to noon. 

Part of the wheat strength might have came from more wheat tour results and even some of the information coming out of our area.  That being the prospects for wheat look very bad; lots of insurance agents out and indicating that early next week some stuff will be adjusted to 0-5 bushels.  But I think the bigger story was one of the updated forecast models showing  for some more freeze weather later this week.  A cold snap that could go all the way down south into parts of Texas.  I think that is really what got our market excited.

In the last 5-10 mins wheat did have about a 10 cent or so trading range so the volatility seemed to last the whole session.  With the crop tour still going on for the next few days look for that volatility to stay.  But one thing that we and the market seem to be keep in mind is the fact that we don’t have a great way to really evaluate the wheat given how early some of it is.  One of the tweets on twitter today indicated that only about 1-2% of the wheat was heading out on this tour; versus 70 % or so last year and about 20% normally.  So how good of a job will this tour do?  Will it be measuring potential?  Overstate it?  Understate it?  Or will it really come down to what happens with mother nature in the next few days/weeks ahead?  Obviously a frost later this week could really smoke the wheat crop hard and that won’t be accounted for in this crop tour. 

Overall the reports have been decent to good in the tour; but I don’t know that they are any better than expectations for those areas either.  The next few days should see more of the poor wheat getting looked at and those reports are likely to be more friendly.  But once again the weather forecasts will probably trump this news.  A freeze right now could mean huge damage; it might make more of our wheat non-milling plus who know how much quantity could be shaved off this already hurt crop?

Tomorrow we will have ethanol info out; market is looking for continued improved production because of the improved margins.

The other thing in weather is the system that is suppose to hit much of the corn belt in the next couple of days.  Sounds like 1-5 inches of moisture for many parts of Iowa.  One report I heard was of a foot of snow potentially in Iowa later this week.  I did see some of the 6-10 day and later forecasts show some improvement and that might have helped ease the corn rally that we had going last night and earlier in the session.  Bottom line is these forecasts will continue to change a couple times a day; how important they will be should depend on how much moisture the eastern corn belt gets hit with later this week.  If the event is a bust while then some of the deferred forecasts won’t be quiet as important; while if it is as wet or wetter then forecasted the other deferred forecasts will become more important.

I did see on twitter today a few different pictures of some field work happening in parts of Iowa; NE, ND, SD; so some progress is happening.  But it seems like overall the progress is maybe happening in the outlying states; not all of the I states where our crop is really determined.

Here are some more tweets with info and various links for the wheat crop tour.  These are using hash tag #wheattour13 and @hedgeit

Field 15. South of Atwood, KS. Visual 18. Calculated 23. pic.twitter.com/X2SRhwjlR9
Field 14. Rawlins county. pic.twitter.com/ULEqjJp1dr
Correction to field 14. Calculated yield 24 not 17.
Field 14. Rawlins county, KS. Visual yield estimate 24. Calculated 17. Dry area. pic.twitter.com/X93gHOA353
Field 11. A few miles West of phillipsburg. 30 days from heading. Visual 38. pic.twitter.com/giOexMUxNE
Field 12. West of Norton, KS. Yield 48-46. Rain will make it or break it. Wheat on corn. pic.twitter.com/BD4WjqwDNx
Field 13. Decatur county, KS. Calculated yield 38. Visual yield 42. Plants 6-8" tall. Had a faint hay smell from freeze damage.
Field 10. Phillipsburg, KS. Freeze damage to tillers. Looks dry. Moisture about 2" down; not sure how much. Yield 38. pic.twitter.com/AMllO5RP4e
Field 9. By Athol, KS. Yield between 48-52. Freeze damage evident. Ten inch rows. 45 heads per foot. pic.twitter.com/Za1aLE9I5h
Field 8. By Lebanon, KS. Visual yield 42. Calculated yield 51. About 25 days until it heads out. pic.twitter.com/935TXyJhCw
Field 7. A few miles outside of Mankato, KS. Estimating 48 bu yield. Wheat on wheat. pic.twitter.com/9yp7udsaqi
Field 6. Border of Republic and Jewell counties off hwy 36. Wheat after beans. 47 bu. pic.twitter.com/UQVtBByHAM
Field 5. KSU Research Plot, Belleville, KS. More freeze damage but still cosmetic. No disease so far. 74 bu est. pic.twitter.com/1m8eyPQ3pr
Field 3. Cloud county, KS. Along hwy 24. Wheat on wheat. Seeing some freeze damage. This field worse than first two. pic.twitter.com/Z4hXMpLm5s
Field 4. South of Concordia, KS. Getting drier. Est. 51 bu. pic.twitter.com/0vZOQ8JI3g
Field 2. West of Clay Center, KS. 7.5 inch rows. Visually 54 bu yield. 64 heads per foot. pic.twitter.com/m8eQZjoWQP
Field 1. Approx 5 miles west of Riley, KS. Will head out about May15-20. Should make 60bu pretty easily. pic.twitter.com/QQ7TVAOo1G



Nebraska Wheat‏@NebraskaWheat42m
#wheattour13 Conclusion: #Yields will take a hit and moisture is badly needed. #pleaserain



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Colorado Wheat‏@coloradowheat52m
West of Cope, CO, 26.5 bu/acre estimate. #wheattour13



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US Wheat Associates‏@uswheatassoc53m
Side by side fields near Zurich, late planting, wanting to grow, but needs help, 25 & 23 bpa @ldreiling #wheattour13 pic.twitter.com/1EeqM971lO



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Colorado Wheat‏@coloradowheat54m
Wrong pic of Cope irrigated - here is the 53.8 field. #wheattour13 http://ow.ly/i/20CAf



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KansasWheat‏@KansasWheat55m
Wheat Yields Forecast at 45 Bushels in 12 Kansas Fields http://bloom.bg/ZjB300  via @BloombergNews #wheattour13



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Colorado Wheat‏@coloradowheat55m
12 mile so. of Cope, CO, on CRP, 15.3 bu/acre estimate http://ow.ly/i/20CwW   #wheattour13



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Colorado Wheat‏@coloradowheat57m
1 mile south of Cope, CO, irrigated, est. 53.8 bu/acre. #wheattour13 http://ow.ly/i/20CsN



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KansasWheat‏@KansasWheat1h
#wheattour13 With rain,, this field near Oberlin has 21 bpa potential. Super dry soils. Bright side: 0 freeze damage! pic.twitter.com/b3EOk2Wpah



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Nebraska Wheat‏@NebraskaWheat1h
Finished scouting fields in KS & NE. Seeing spotty stands, freeze damage, and later than normal development. #wheattour13



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CMEGroup‏@CMEGroup1h
@mattleising Perhaps next year you could join #WheatTour13



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Matt Leising‏@mattleising1h
I'm strangely hooked on these wheat tour pics, very cool, and calming RT @CMEGroup Field in Sheridan   #WheatTour13 http://stks.co/bSGm



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John Everitt‏@wildjohn19631h
#wheattour13 Saying the wheat crop will make if it rains Is like saying the Jets would have won the Super Bowl if they had Kept Tim Tebow



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KansasWheat‏@KansasWheat1h
#wheattour13 Just east of Nicodemus. Soil is very dry. Freeze damage to wheat; 33 bu/acre yield estimate. pic.twitter.com/2DQxFbXBY4


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CMEGroup‏@CMEGroup1h
Field in Sheridan County using average 15.9 bpa, using lower standard deviation 13.1 $ZW_F #WheatTour13 http://stks.co/bSGm



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KansasWheat‏@KansasWheat1h
#wheattour13 In a wheat field Near Salina, a #photobomb with Tim Unruh of the @salinajournal pic.twitter.com/BAldRGnsoG



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KansasWheat‏@KansasWheat1h
#wheattour13 North of Norton, there is no soil moisture to speak of. With rain, this crop will make 31 bu/acre. pic.twitter.com/xtRxEATosS



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Hays Daily News‏@NorthWestKansas1h
MT @KansasWheat: #wheattour13 Near Stockton, 46.7 bu/acre, if it gets rain. freeze/ice damage, 16" soil moisture. pic.twitter.com/p52YjTBt68


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CMEGroup‏@CMEGroup1h
The 56th Annual Hard Winter Wheat Tour coordinated by the Wheat Quality Council opened April 29 http://stks.co/cSI6  $ZW_F #wheattour13



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KansasWheat‏@KansasWheat1h
#wheattour13 Near Stockton, 46.7 bu/acre, if this crop gets rain. freeze/ice damage to leaves. 16" of soil moisture. pic.twitter.com/oN7tKyv8mg



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US Wheat Associates‏@uswheatassoc1h
Nursery plots at KSU experiment station in Hays were planted late, so look great, 53 bpa #wheattour13 @ldreiling pic.twitter.com/1b2xIgomQ4



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Katie Micik‏@KatieMDTN2h
This Decatur Co. field est yield 21.5 bpa. I say, only if it rains and keeps raining. Poorest field yet #wheattour13 pic.twitter.com/4xB0O5XzlA



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US Wheat Associates‏@uswheatassoc2h
Poor, short, weedy, dry stand near Liebanthal, 19 bpa @ldreiling #wheattour13 pic.twitter.com/VNf3XaU1ZU


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Katie Micik‏@KatieMDTN2h
Our first field in Norton Co. looked like it had just emerged. Est. Yield of 29.9 bpa, but it really needs a drink. #wheattour13


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John Everitt‏@wildjohn19632h
#wheattour13 is it cold enough on KS for you boys to still be drinking schnapps being a late spring n'all



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US Wheat Associates‏@uswheatassoc2h
Important to keep in mind that tweets are estimates from individual fields along one route on this tour, avgs will come tonight #wheattour13



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Farm Futures‏@FarmFutures2h
#wheat prices up  ZWK3 721.75 +12; ZWN3 731 +14.5; KEK3 798 +17.25; KEN3 789.5 +13.75 #farm #markets #wheattour13 #agchat



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CMEGroup‏@CMEGroup2h
Dry in Rooks Cty. Estimated 47.5 bpa, but seems high http://stks.co/gTX8  #WheatTour13 $ZW_F



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US Wheat Associates‏@uswheatassoc3h
Dry, dry field north of Hoisington, very very little subsoil moisture, 28 bpa @ldreiling #wheattour13 pic.twitter.com/ZyZpoYmfvG



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Russell French‏@frenchrw3h
@jerodmcdaniel I think #wheattour13 should be done on Harleys. Would be more fun


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CMEGroup‏@CMEGroup3h
Fields in Russell and Osbourne Counties dry. Spotty, short, late planted avg. at 33.8 bpa #WheatTour13 $ZW_F



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Katie Micik‏@KatieMDTN3h
Definitely dry in Phillips County. Formula pegs yield at 44.2 bpa but that's definitely a stretch without rain. #wheattour13



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Arlan Suderman‏@ArlanFF1013h
RT @KatieMDTN: Just sampled two side by side fields. The thicker, earlier planted had an est. 59 bpa yield, other 30 bpa. #wheattour13



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Tom Polansek‏@tpolansek4h
Wheat futures jump 3 pct on damage concerns as Kansas crop tour begins http://www.reuters.com/article/2013/04/30/markets-grains-idUSL3N0DH1TX20130430 … #wheattour13



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US Wheat Associates‏@uswheatassoc4h
Cracks in the field near Hoisington, how deep will they be in Colby? #wheattour13 @ldreiling pic.twitter.com/99hTXCx1m0



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US Wheat Associates‏@uswheatassoc4h
Baby E is sad, but @ldreiling  says to cheer up, with rain this wheat could make 43 bpa #wheattour13 pic.twitter.com/lmuiPYyGEy



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KansasWheat‏@KansasWheat4h
#wheattour13 - Phillips Co. wheat needs a rain badly. 40 bu/acre today, but no soil moisture. freeze damage on leaves pic.twitter.com/HiPBFdCz1y


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Colorado Wheat‏@coloradowheat4h
3 miles w of Cope, Colo, 26.5 bu/acre yield. #wheattour13 http://ow.ly/i/20uXg



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Beeson Inc‏@Beesoninc4h
Cloud/Mitchell high 50s BPA. Limited freeze damage.  Expecting conditions to dry out as we head west. #wheattour13 pic.twitter.com/r1cdZyzsYq


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Colorado Wheat‏@coloradowheat4h
RT @peteloewen: Newsflash* #Wheattour13 expected to last til next Thurs as participants spend more time tweeting than checking fields.



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CMEGroup‏@CMEGroup5h
Here's a closer view from Ottawa County. Average 45.2 bpa #WheatTour13 http://ow.ly/i/20uae



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Jerod McDaniel‏@jerodmcdaniel5h
I love how everyone knows the #wheattour13 numbers are overstated due to growth stage, yet it like let's just run with it anyway...



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Colorado Wheat‏@coloradowheat5h
5 mi east Anton Colo 21.1 bu/acre estimate yield #wheattour13 http://ow.ly/i/20u47



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Jerod McDaniel‏@jerodmcdaniel5h
Everyone on the #wheattour13  should download @mikemcclureband on iTunes, great music!



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CMEGroup‏@CMEGroup5h
HEre we are in Ottawa County on Highway 18 and 106 intersection. Average 45.2 bpa #WheatTour13 http://ow.ly/i/20tYL



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Colorado Wheat‏@coloradowheat5h
7 miles w of Anton, est yield 39.0 bu/acre. #wheattour13 http://ow.ly/i/20tW3



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KansasWheat‏@KansasWheat5h
#Wheattour13: Smith Co., at KAWG dir. Theron Haresnape's farm. Dry soils, 52 bu/acre potential, plntd in failed corn. pic.twitter.com/qtqOZyR9xv



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Katie Micik‏@KatieMDTN5h
Really going to need to do a tick check later -- y drivers found at least 4 crawling on him so far. Yikes! #wheattour13



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Katie Micik‏@KatieMDTN5h
Just sampled two side by side fields. The thicker, earlier planted had an est. 59 bpa yield, other 30 bpa. #wheattour13



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Mike ODea‏@WheatTraderFCSt5h
@jerodmcdaniel old times crop was judged by the ability to see or not see beer cans thrown in field #scientific #wheattour13


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Jerod McDaniel‏@jerodmcdaniel5h
Wheat in Oklahoma Panhandle going to get 5th hard freeze of 26 in two days... Wheat might make 1bpa with a drink... #wheattour13



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Jerod McDaniel‏@jerodmcdaniel5h
If I ran a tour group it would go something like this...

Wheat's dead. Where is the bar, every little Kansas town has a bar?

#wheattour13


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US Wheat Associates‏@uswheatassoc5h
Wheat trying to recover near Frederick, but stems are cracking, 38 bpa with a drink #wheattour13 @ldreiling pic.twitter.com/7wn1Cx6Or6



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Jerod McDaniel‏@jerodmcdaniel5h
Follow me for all the #wheattour13 updates!

Not really, I just wanted to throw that out there.



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Aurelien Perier‏@AurelGrains5h
all right, #liffe close tomorrow so see you Thursday with much informations about #wheattour13 !! #farm


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Kyle Abbott‏@KyleTAbbott5h
Freeze hurt. Need rain! RT @KatieMDTN: Near Smith Center got our lowest est. of the day, 32.5 bpa. Short plants in 10" rows. #wheattour13



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Hays Daily News‏@NorthWestKansas5h
RT @KatieMDTN: Near Smith Center got our lowest estimate of the day, 32.5 bpa. Short plants in 10 inch rows. #wheattour13


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Scott Haley‏@CSUwheatguy5h
@danmaltby1 I wouldn't bet on it. I know the CSU #wheatbreeding program won't be done by end of July. We are very late in CO. #wheattour13


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Katie Micik‏@KatieMDTN5h
Near Smith Center got our lowest estimate of the day, 32.5 bpa. Short plants in 10 inch rows. #wheattour13


 Retweeted by Ken Smithmier
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Colorado Wheat‏@coloradowheat5h
#wheattour13 20 miles west of Last Chance CO, 28.8 bu/acre estimate. @CSUwheatguy http://ow.ly/i/20srg



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dan maltby‏@danmaltby15h
@CSUwheatguy hah; trick #wheattour13 question; answer is NONE.
nice try. ALL of that  #wheat will be harvested in July...



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Colorado Wheat‏@coloradowheat5h
Last chance photo #wheattour13 http://ow.ly/i/20sar



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Colorado Wheat‏@coloradowheat5h
3 miles east of Last Chance, est 30.3 bu/acre #Wheattour13



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Katie Micik‏@KatieMDTN7h
All the fields today are WAY behind in development, but our yields are solid, 61.8 bpa in Washington Co and 49.5 in Republic CO #wheattour13
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ken morrison‏@morrisonmkts7h
Reply to @KatieMDTN given the lateness, what's the level of confidence in the tour estimates compared to say a 'normal' year ?
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Katie Micik‏@KatieMDTN6h
@morrisonmkts I'd say the formula we use will overestimate yields this year. More tillers out there than normal bc of how late it is.
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ken morrison‏@morrisonmkts5h
@KatieMDTN it might be useful to compare the 2007 KS Tour estimate to final yields
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Katie Micik‏@KatieMDTN5h
@morrisonmkts good idea. In 2007 tour estimate was 392 mb with a 41 bpa avg yield. USDA final was 283 mb. #wheattour13


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9:10 AM - 30 Apr 13 · Details




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ken morrison‏@morrisonmkts5h
@KatieMDTN  without looking,I'd bet that was the biggest % miss ever for the KS Tour... keep in mind % headed in 2007 was 7% vs. 1% now
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Brock Associates‏@TheBrockReport5h
@KatieMDTN @morrisonmkts Wow--that's a big gap!
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US Wheat Associates‏@uswheatassoc5h
@KatieMDTN @morrisonmkts 2007 had significantly more subsoil moisture for the crop to draw from. @ldreiling
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Greg Akagi‏@GregAkagi5h
@morrisonmkts @KatieMDTN I was on 97 tour w/est. in the low 200 million's. May had cooler temps and rains and #KS had 506 million bu crop.
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ken morrison‏@morrisonmkts5h
@GregAkagi @KatieMDTN Interesting but both the '07 and '97 variances reinforce my view to take this year's Tour ests w/ a grain of salt
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KansasWheat‏@KansasWheat5h
#wheattour13 - Near Salina at Justin Knopf's farm, 65 bu/acre. Freeze damage hard to est. 36" of soil moisture. pic.twitter.com/ih3XkNawuP



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Scott Haley‏@CSUwheatguy5h
@danmaltby1 Yup. Or in other words, how many of the tillers we're counting will have grain in them at harvest in September?  #wheattour13


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Katie Micik‏@KatieMDTN5h
Field in Jewell Co. will be toast if it gets hot and dry. Itty bitty wheat w/o a flag leaf yet. Est yield at 43.8 bpa #wheattour13



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US Wheat Associates‏@uswheatassoc6h
Head from field near Marquette, short on moisture but could make it, 42 bpa #wheattour13 @ldreiling pic.twitter.com/z2hapLgG5h



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Scott Haley‏@CSUwheatguy6h
I'm hoping my genomics based yield predictions are more robust than these estimates. #wheattour13 #wheatbreeding @danmaltby1


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Katie Micik‏@KatieMDTN6h
The stand in that last field was thick! Got an 81 bpa estimate is Republic Co. Probably high, but the best field we've seen yet #wheattour13



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Jeremey Frost ‏@FrostJeremey6h
@coloradowheat is that better or worse then expecations for that area? #wheattour13



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Katie Micik‏@KatieMDTN29 Apr
Getting ready to kick off #wheattour13! Here's a map of the routes we'll be driving in Kansas the next few days http://tinyurl.com/cz6xg7k

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KansasWheat‏@KansasWheat6h
#wheattour13 - near Chapman, a wheat stand thick enough to hold up a hat! pic.twitter.com/Qvi1TlXhnw


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Colorado Wheat‏@coloradowheat6h
1 mile NE of Byers Co est yield 43.7 bu/acre. #wheattour13 http://ow.ly/i/20pEp



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US Wheat Associates‏@uswheatassoc6h
#wheattour13 mixed opinions on field near Lindsborg with @ldreiling , settled on 42 bpa but a good drink would help #wheattour13



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Kansas Dept of Ag‏@KansasDeptofAg7h
How has the cold spring impacted the #Kansas wheat crop? Follow the #wheattour13 with @uswheatassoc @KansasWheat @KatieMDTN



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US Wheat Associates‏@uswheatassoc7h
@razrbx @ldreiling heads are green and looking ok, but some are in rough shape #wheattour13



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CMEGroup‏@CMEGroup7h
Follow #wheattour13 and tweet your questions @kansaswheat @uswheatassoc @KatieMDTN for their live commentary this week $ZW_F



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CMEGroup‏@CMEGroup7h
Here's a map of the 2013 Kansas Wheat Tour #wheattour13 (HT @KatieMDTN) http://ow.ly/kzgwj



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US Wheat Associates‏@uswheatassoc7h
Thick wheat bouncing back from some early freeze damage, 77 bpa but likely not good quality #wheattour13 @ldreiling pic.twitter.com/UAxYv5YhXQ



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KansasWheat‏@KansasWheat7h
#wheattour13...12 miles west of Washington, 52 bu/acre, 26-inch moisture profile. No-till system. pic.twitter.com/adn5vb4NXG



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US Wheat Associates‏@uswheatassoc7h
Near Solomon, mushy heads illustrating more freeze damage, lucky to make 34 bpa #wheattour13 @ldreiling pic.twitter.com/LlNQtYxchk



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Bryce Anderson‏@BAndersonDTN7h
Where wx's been best. RT @KansasWheat 1st rpt #wheattour13-Leonardville Hwy 24, 48 bu/A, 30" soil moisture, no freeze pic.twitter.com/GkCjIMDavS



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US Wheat Associates‏@uswheatassoc7h
@ldreiling and Julia east of Navarre seeing freeze damage with roughening of stems, 37 bpa may be high #wheattour13 pic.twitter.com/1m0nLkTt5x



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Katie Micik‏@KatieMDTN8h
@IntFarmNet we just started scouting this morning. Follow #wheattour13 for all the tweets!



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US Wheat Associates‏@uswheatassoc8h
@ldreiling says this field has been loved near Woodbine, 44 bpa estimated #wheattour13 pic.twitter.com/YiwOWpmw43



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US Wheat Associates‏@uswheatassoc8h
Really pretty wheat in NE Morris county, 41 bpa #wheattour13 pic.twitter.com/vk9x8GTD8J



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KansasWheat‏@KansasWheat8h
1st report from #wheattour13 - near Leonardville on Hwy 24, 48 bu/acre, 30 inches of soil moisture, no freeze dmg. pic.twitter.com/zZGyu9ZvMM







Jeremey Frost
Grain Merchandiser
Midwest Cooperatives

Opening Comments 4-30-13


Markets are called mixed this a.m. after a choppy mixed overnight session.

When the overnight session ended Corn was unchanged on old crop after being up a dime at one time, Dec corn was up 2, KC wheat was off 6-7, MPLS wheat off 5-6 cents a bushel, CBOT wheat was off 6-7 cents, July beans up 6 ½, and Nov beans up 3-4 cents.  Outside markets have a US dollar about unchanged, equity futures are pointing towards a mixed (unchanged) start, gold is up a couple bucks, and crude is down about 30 cents a barrel.

1.       Markets started firm last night with the crop progress that was a hair further behind then most had estimated; but as the night wore on we gave most of our gains back.  With wheat leading some of the pressure; perhaps some of the wheat pressure is coming from the wheat crop tour which started in good areas.  The couple of comments I seen on twitter were
2.        
3.       @KatieMDTN12m
Our first stop of the day in Riley County, Kansas, got an est. yield of 58.1 bpa. That stuff was short and young. #wheattour13

Field 2. West of Clay Center, KS. 7.5 inch rows. Visually 54 bu yield. 64 heads per foot. pic.twitter.com/m8eQZjoWQP
Field 1. Approx 5 miles west of Riley, KS. Will head out about May15-20. Should make 60bu pretty easily. pic.twitter.com/QQ7TVAOo1G


Keep in mind that this is expected in this area; but as they move the tour on we should see more mixed to poor results.

It still looks like Iowa and other parts of the corn belt will get hammered with moisture in the next few days; but some of the 6-10 and 8-14 day maps show normal to below normal perception chances with the exception of the far Eastern corn belt.  So a slight change from yesterday.  As these change the look for our market to potentially move.


Watch weather forecasts and wheat crop tour results for more market direction.  Also keep in mind that some charts have went through some resistance points; but others have moved right up to resistance areas.  In regards to marketing I know that one thing that Ed Usset has always done is write a marketing plan that is pro-active trying to make sales in the time period when we could see weather scares.  I think yesterdays move counts as a weather scare.  Listening to him speak and reading his book lets you know that the reason Ed likes to make sales in this time period is because of the strong seasonal tendencies that corn has; which is to move up towards May/June before falling off a cliff starting around July.  Last year was very different and early sales didn’t work good but this year’s fundamentals and the job of the market appears to be different. 

As it sits today even with a yield of 150 on 90 million acres planted we will have to find demand that we lost this past year.  Very possible; but keep in mind that to only get 90 million acres we need the present fear to be reality.  The yield now that won’t be decided for some time; but the stuff that does get in the ground looks like it will have good subsoil moisture.  Trend line yields are close to 160-170.

Last year as the yields and drought hit the job of the market became to curb demand.  That is not the case today; and for that to be the case for year over year we will have to have a complete train wreck.  The job of the market is still to find demand at least until we can do a better job of pegging what our crop size is.

I think all we are doing now is adding some premium back into the market.  Fundamentally things are more friendly but not nearly friendly enough to sustain much higher prices for a long period of time.  So use what the market gives you wisely.



Please give us a call if there is anything we can do for you.

Monday, April 29, 2013

Closing Comments - Corn up the limit - best day in 10 months


Markets closed firmer across the board today on weather and short covering.

Corn lead the strength up the limit of 40 cents on the nearby contract, while new crop December corn was up 35 ½, KC wheat was up 25, MPLS wheat was up 15, CBOT wheat was up 24, July soybeans were up 28, Nov soybeans were up 19, the DOW was up 106 points, gold was up 22 bucks an ounce, crude was up a 1.50 a barrel, and the US dollar is about unchanged with the cash index at 82.12.

Weather got the markets moving; then some technical buying and short covering gave corn it’s best up day in months.  Weather has cool and wet in the deferred forecasts and parts of the corn belt forecasted to get 1-3 inches this week; some of which could be snow in Iowa.  This leads to idea’s that the yield and acres could shrink.  Typically we see a yield reduction when corn gets planted too late and that is what the market focused on today.

Adding some fuel to the fire this afternoon was the crop progress; that showed corn at only 5% planted versus the 31% on average and last year’s 49% planted. 

Here is a good recap of the crop conditions from CHS Hedging



Some strength in the corn market also came from the fact that the funds had moved to their shortest position since April of 2010.  So perhaps many had already sold our market down because of the known fundamentals and now we add talk that perhaps those fundamentals are changing.  Perhaps we are losing both acres and yield via the slow planting.

Here is link to Friday’s CFTC recap from CHS Hedging.


So today we had the picture change; but today’s picture changing is a weather market change.  One thing that helped our markets out is the fact that when everyone left on Friday the forecasts had some warm and dry in them; just a few days later come Sunday night they had changed.  Weather markets can change in a hurry so by no means is there a guarantee that we will follow up today’s strength.  It could happen but the market could easily be selling off later in the week saying “rain makes grain”. 

Plus fundamentally how high do we need to go?  Think about the fact that we have to increase demand year over year unless we grow a crop something like 11 billion.  If we grow 12 billion we need to find about a billion bushels demand increase over what we are projected to use.  If we dropped our corn acres down to 90 million and yield of 150; and harvested 90.6% we would still grow a crop of about 12.3 billion bushels.  That would be a decrease in the yield of 5-15 bushels versus most of the estimates out there.  Some of the guys I talk to have thought for a while that we are trading 155-160 on yield; the USDA in their outlook for had a 163-164 yield.  As for the acres the March planting intentions were 97 million acres; have we already lost 7 million acres?  In our area we have probably actually gained some acres via the failed wheat; not enough to make a difference but a small increase none the less. 

Bottom line is if this is a rally that is simply driven by fear; fear that we won’t get the corn in it is probably a rally that at some point should be sold.  I wouldn’t bet against the American Farmer; and if we can continue a rally and guys don’t take some risk off the table via getting protection or making some sales that is what you will be doing.  Betting against yourself.

That being said if the funds decide to jump on board things could get crazy over the next several days, weeks, and months ahead.  If that happens it should make marketing difficult; as when our markets go up it feels like they just don’t want to stop.  Bottom line is using some risk management or having a game plan is recommended; because when this thing falls it could get very ugly.

The other thing that we really need to keep in mind in regards to marketing is the fact that the average producer is very undersold for new crop corn.  The market likes to do what it can to hurt the most.

I don’t want to come off as all bearish; as I am not.  I think the charts perhaps have turned and we could see a bounce as we go forward; but I do think that guys need to realize that this might be a second or last chance.  We don’t have the demand to really have a huge run up (sustained) on new crop prices; at least not today.

Moving on; other news today included export shipments.  Corn came in line with estimates but well below what we need on a per week basis, wheat shipments were very strong and well above estimates and the needed per week to meet current USDA supply and demand balance sheet projections, and beans came in very close to estimates as well as what we need on a per week basis.   Bottom line no real market mover here.

Winter wheat conditions did drop 2% in the G/E category, and spring wheat planted jumped to 12% which is still well below the 37% on average.  Neither this nor the lack of corn planting is probably new news; the wheat crop tour will be new news as we see those updates over the next couple of days and the latest forecasts will also be important.  If the rain fall for the corn belt doesn’t materialize and the latest forecasts start calling for warm and dry we could easily give back some of today’s rally.

For the wheat crop tour you can follow some of the info on twitter using hash tag #wheattour13.

Here is link for the map of the tour that some will be following.  By the looks of it tour is probably starting in good area’s but as it moves on it appears to be moving in to more stressed areas.  I find it hard to believe that this tour will be bearish; but we do have to ask our self how bullish can it be and how much of it is already built into the market.


Also looks like parts of KS could get down below 30 on Wednesday night after being close to 90 today.  That could make things interesting with the possible freeze happening during the tour.

Tomorrow is first notice day for May futures.  No limits and with the lock limit move for July and September corn limits will be expanded starting tonight to 60 cents a bushel.

Please give us a call if there is anything we can do for you.

Thanks

Grain Merchandiser
Midwest Cooperatives
800-658-5535
800-658-3670
605-295-3100 (cell)
605-258-2166 (fax)




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Opening Grain Market Comments 4-29-2013 VERY Firm Markets


Markets are  called better this a.m. on firmer overnight markets lead by weather forecasts and the delayed planting progress.

In the overnight session new crop corn lead the strength up 14, while nearby corn was up 12 cents, soybeans ended the overnight session unchanged to off a couple pennies, KC wheat ended the overnight session up a nickel which is about a dime off of its overnight session highs, CBOT wheat was up 7, and MPLS wheat was up 5-7.  Outside markets look to be supportive this a.m. with Gold up 15 bucks an ounce, crude up 70 cents a barrel, the US dollar off about 190 ticks with the cash index at 82.190, and equity futures are pointing towards an up 50 or so start for the DOW.

Same news that producers were talking about and scratching their heads on why on our markets were going down at times last week has helped our markets bounce some in the overnight session.  Adding some fuel to the fire has to be the most recent 6-10 day 11-14 day forecasts that call for much of the corn belt to be cool and wet. Going home late last week some of the forecasts had provided a window of getting some field work done.  We already know that we will be very far behind in this afternoon’s crop progress/condition update but some forecasts indicate that many areas (primarily the corn belt) could fall further behind.  Sitting here today it might not be a major concern; but in a couple weeks talk will be of losing acres as well as the yield drop that typically goes with late planting. 

For marketing the question we really have to ask our self is what does this do to the big picture.  First off losing acres means we need to have higher yields; the less acres we have the more important yield becomes.  But secondly we have to ask our self how much will the big picture change?  If we lose acres because of too much moisture will the other acres more than help offset via having better moisture profiles?  I guess this is really debatable; but keep in mind that if some places are not planting because of too much moisture other areas might be getting ideal moisture.  The idea of losing corn acres also leads to the thought of increased soybean acres and that should make it no surprise that beans are struggling while corn is up double digits.  Third is our possible production cut in corn material?  Or is it needed to prevent the balance sheet from getting too burdensome?  Meaning have we dropped below a 13 billion bushel production yet?  If we haven’t doesn’t that mean we still need to find nearly 2 billion bushels of demand to keep our balance sheet unchanged from this year?  Have we ever found 2 billion bushels of demand year over year?  No.

Bottom line is if this rally can get some legs to it; don’t be afraid to take some risk off.  Yes you want to ride it and given were the funds are the upside could have plenty of room; but at some point typically fear rallies need to be sold.  Not right when they start but typically at the point when guys all get bulled up.  I can stand here today and mention the bearish points; so everyone isn’t bulled up.   But if this bounce can get us back up to 5.00-5.50 or so cash new crop corn; taking some risk off the table will just be good risk management.  It doesn’t mean one has to make big sales or many sales; but with rallies one wants to get them back to a comfortable spot be it making sales or the use of futures or options.

Other news out includes the wheat tour which starts today and with twitter and other internet sources we should see lots of info and plenty of pictures.  I believe the actual production estimate will be out on Thursday. 

We will have export shipments out at 10 this a.m. and crop progress/conditions out at 3 this afternoon.

The Chinese markets are closed though Wednesday.

First notice day is tomorrow; so it will be interesting to see what shakes out with the May contracts and see how strong the cash markets actually are.  Many will say that the July contract should drift up towards the level that the May go off at.

Please give us a call if there is anything we can do for you.

Friday, April 26, 2013

Opening Comments 4-26-2013


Markets are called a little weaker this a.m. after an overnight session that saw some pressure.

In the overnight session corn was off 6 – 7 cents, KC wheat was down 5-8 cents, MPLS wheat was off about 3 cents, CBOT wheat was 5-7 lower, and soybeans were down 3-8 cents.  Outside markets have the stock market pointing towards a lower opening, the US dollar is off with the cash index at 82.570, crude is off about 55 cents a barrel, and gold is up 5.50 an ounce.

Yesterday wheat had a decent day lead by KC wheat; let’s see if today when the pit opens if the market can go back to focusing on what it did yesterday and the same reasons producers haven’t had much interest selling.  Bad looking winter wheat crop that has been hit with drought stress and lately freeze threats; that along with the lack of spring wheat planting should give the market a little support; but that news has been out there for some time.  What really matters is if the funds want to focus on the fact that wheat (hard red winter wheat in particular) could be off dramatically; or if the funds want to focus on the fact that even with a small winter wheat crop we likely have a burdensome balance sheet or at least not a tight one simply because of the old crop carryout and the world balance sheet outlook.

Bottom line for wheat is we could easily continue a short term bounce or weather scare; but without solid demand if we get a 50 cent to buck bounce one really should be taking risk off the table.  Perhaps some sales should have been made on yesterday’s bounce?  I think I would want to be a little patient with next week’s crop tour; but I also want to realize that any major rallies probably need to be met with good risk management.  Some of the reason for proper risk management for wheat is the new crop corn risk.  I don’t view the new crop corn risk as really nearby; I think we will have to get through the growing season; probably all of it.  Some out there having been predicting corn to get down to 4.00 some as cheap as 3.00 and I don’t think we can have 3.00 corn and 8.00 wheat……perhaps it is possible but not very realistic.

The real question that we really don’t know is what is fair corn price on different production levels and different carryout levels.  It seems like we have a 5.00 ish floor when the market is thinking we have about a  2 billion bushel carryout; but is that the floor with some premium added in?  What I mean by this is the last couple years 5.00 has held as support for new crop; then when we had some issues we bounced.  If we don’t have any issues will 5.00 stop the bleeding that we presently have going on for new crop corn?  I don’t know that answer and I think that is really our risk.  What will money flow do if at the end of the day we actually end up with a carryout 2 billion or so; what about if production is really good and our carryout ends up closer to 3 billion?  How cheap could wall street push our prices?

So back to wheat; yes I do look for some strength as they report the crop conditions.  Fundamentally we don’t exactly have a run away HRW crop; we have one that has been hit by numerous freezes, had the worst even starting conditions, and hit by one of the worst droughts on record.  But with out demand that will only take us so far and our longer term risk will be the ag markets in general.  With lower wheat production wheat should or could easily out perform some of the other grains; but how much risk do the other grains hold for our wheat market?

Bottom line is wheat is a sleeper but for it to pan out we will need to have some help in probably numerous ways.

Other news out this a.m.  It sounds like a BACE still has the Argentine soybean crop at 48.5 MMT versus the USDA at 51.5.; they also lowered the corn crop to 24.8  versus the USDA at 26.5.  But IGC also lowered the imports of beans for China due to demand concern via the bird flu issue.

Weather does look like it gives some opening for some field work in some places over the next week or so.  Some guys locally sound like they might try things today.  Look for Monday’s progress report to be friendly; but also realize that the newest forecasts will likely act as a trump card over what is or isn’t done in the report. 

Today is option expiration and first notice day is next week.  One thing next week should bring is how strong the cash markets actually are via delivery. 

Please give us a call if there is anything we can do for you.