Farmer selling picks up as beans hit new highs April to June time slot. Weekly ethanol production was down 9,000 barrels per day to 919,000 barrels per day, which was better than expected. OUTLOOK: Demand for old crop corn is providing a floor to prices. The uncertainty over how much China may purchase should limit downside ideas. For new crop, weather talk is creeping into everyday conversations and how current snowfall will benefit the soil moisture profile. This winter has been warm and dry, which should lead to early planting, but many areas will need rain once the crop is in. Early planting normally means corn can miss the hottest temperatures when it pollinates, giving it a better shot at higher yields. But I’m not telling you anything you don’t know. New crop will feed off weather and the moving target of soybean carryout. For the week, March corn was down a penny at $6.40 3/4 and the December contract was 10 1/4 cents lower at $5.58 per bushel. SOYBEANS — Soybeans continued their trek to $12.90 to $13 this week on good demand and disappointing rainfall in Brazil’s Rio Grande do Sul
months coupled with the amount of pork in cold storage, this would back the idea that pork demand is good. Slaughter of hogs is higher than a year ago, and at the same time we have seen only a minor increase in the stocks of pork in storage. Given this fact and that hog numbers are fairly stable, this should reflect on a fairly stable if not an improving outlook for hog prices. The hog market has not seen the money flow into the futures as the cattle have experienced and therefore a much more benign market and a market that is following more closely the underlying fundamentals. If the beef prices move higher, look for pork prices to continue to firm as demand shifts away from beef into the better value pork. Producers should continue to monitor the hog market and protect inventories against any adverse changes in the market conditions. ❖
Country boy looking for answers second highest on record. He suggested that farm asset values are likely to increase 5 percent in the coming year. Glauber said that land prices have appreciated by 20 percent or more in different parts of the country, while farmers’ debt levels are set to rise 4 percent. When I read all of these reports, I think that these folks are much smarter than I ever will become. It all makes my head spin and I feel almost hopeless. Then I remember the sage wisdom of my Grandpa. He would tell me, “Remember that high prices will take care of high prices.” Followed by, “it is always a good idea to buy your straw hats in January.” Then, “it generally doesn’t work to do this year, what I should have done last year.” Frankly, I think those three Grain Angles tell me more than the entire team of USDA economists put together. Or maybe I am just a country boy looking for an answer. ❖
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NEHER, from pg. 34A Cotton acreage is expected to decline about 10 percent in 2012 due to lower cotton prices relative to other crops. Acreage for 2012 is projected at 13 million acres. Production however is projected to rise to 17 million bales. Prices are projected at 80 cents a pound for 2012-13. Rice acreage is projected at 2.75 million acres, up 2 percent from 2011. All of the gains will be in the long-grain rice Delta states. Rice is expected to have an average price of $14.70 per hundredweight at the farm gate. The USDA estimates assume average weather and that most of the acreage idled by prevented-planting claims last spring will return to production. Glauber ended his presentation addressing on-farm income. He forecasts net cash income for 2012 to be at $96.3 billion, down 11.5 percent from 2011, but still the
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Hog market stable, if not improving TEALE, from pg. 34A findings were as follows: on-feed, 102 percent; placements, 98 percent and marketed, 102 percent. The report was seen as slightly friendly because of the marketed number. Considering the ramifications of the report it will likely have little effect on the market, since it will depend more on the money flow into or out of the futures in the weeks ahead. Producers should approach the market with skepticism and protect inventories when opportunity presents itself. On the other hand, the hog market has quietly edged higher since the first of the year. Demand for pork has increased due in part to a good export market and an increasing domestic demand. This increase in demand could be the result of the high flying beef cutouts as consumers look for better value in the meat arena. Considering the slaughter rate over the past few
region. Trade chatter contained talk that Brazilian production may fall to 66 mmt to 68 mmt and Argentina to 45 mmt to 47 mmt. The Rosario Exchange cut their soybean production estimate for Argentina from 49.5 mmt to 44.5 mmt due to dry weather. Truckers in Argentina are threatening to strike March 19, which could slow exports. Export line-ups in Brazil also continue to grow. Taking in the problems in South America, we could expect some demand to be pushed back to the United States and could last through the summer. This may also spread to new crop since we’ll need to attract additional acres to soybeans to meet demand. The new crop corn-bean ratio is currently at 2.28. Weekly export sales were a marketing year high of 42.6 million bushels for old crop and 105.5 million bushels for new crop. Total export commitments are running 27 percent behind last year. The USDA Conference’s 75 million soybean acreage projection was supportive to the market in combination of lower South American production figures. The conference’s acreage estimate would be unchanged from 2011-12, but was 1 million acres over the baseline projection. Total production of 3.25 billion bushels is 200 million higher than this year. Yield was pegged at 43.9 bu./acre versus this year’s 41.5 bu./acre yield. Forecasted ending stocks of 205 million are well below this year’s 275 million bushels. Their average farmer price for 2012-13 was $11.50 per bushel versus this year’s $11.10 to $12.30 per bushel estimate. OUTLOOK: Good demand, concern over final yields in South America, and March soybeans were up 11 1/2 cents this week at $12.79 with the November contract up 8 3/4 cents at $12.70 3/4 per bushel. Farmer selling did pick up when soybean prices made new highs for the move which resulted in a slight pull back in basis as we went home for the weekend. Fund buying has contributed to the run-up, keeping a strong uptrend in place. Look for some pull backs, but they should be conservative for the time being. March soybeans closed higher nine out of the last 10 sessions as of Feb. 24.
MARKETING
THE LAND, MARCH 2, 2012
NYSTROM, from pg. 34A China purchased 120,000 metric tons of U.S. corn this week for delivery in the current marketing year, with speculation that the 110,000 mt of corn sold to unknown destination for this year will also go to China. If the 110,000 mt was China, that would bring China’s purchases of U.S. corn for this year to 3.88 mmt, only slightly less than the USDA 4.0 mmt forecast. China announced this week they were easing their monetary policy by lowering reserve requirements for banks. Easier access to money may lead to on-going imports. Argentina’s Rosario Exchange lowered its corn production to “no more than 20 mmt” when they were predicting 21.4 mmt previously. The last USDA estimate was 22 mmt. Weekly export sales were 33 million bushels for old crop, nothing for new crop. Total export commitments are 8 percent behind last year and roughly on pace to meet the USDA number. Cold weather has severely restricted Ukrainian export shipments, likely pushing up interest in U.S. corn, especially from Japan. It was rumored that Japan bought 1.8 mmt of basis corn out of the United States for the
35 A