Local Corn and Soybean Price Index
25 A
Dover Edgerton Jackson Janesville Cannon Falls Sleepy Eye Average: Year Ago Average:
corn/change*
soybeans/change*
$4.65
$12.83
$7.39
$16.53
$4.69 $4.60 $4.89 $4.50 $4.74 $4.49
-.50 -.48 -.40 -.69 -.40 -.60
THE LAND, SEPTEMBER 27, 2013
Cash Grain Markets $12.70 -.57 $12.62 -1.69 $12.57 -1.78 $13.13 -.99 $12.93 -.92 $13.03 -.97
OCT’12
NOV
DEC
JAN ‘13
FEB
MAR
APR
MAY
JUN
JUL
AUG
SEP
Grain prices are effective cash close on Sept. 24. The price index chart compares an average of most recently reported local cash prices with the same average for a year ago. *Cash grain price change represents a two-week period.
Grain Outlook
Corn responds to FSA figures
Livestock Angles
Erratic or mundane, take your pick
Grain Angles
The following market analysis is for the week ending Sept. 20. CORN — A mostly quiet week in the corn market as we ease into harvest. A sharp spike higher on Tuesday was a result of the Farm Service Agency acreage certification data release, but it was unable to hold. The FSA release showed certified corn plantings at 91.4 million acres; prevent-plant at 3.573 million acres. The U.S. Department of Agriculture is using 97.4 million acres. These two agencies’ numbers usually do not show a good correlation to each other. In recent years, the FSA figure has been 3 million to 4 million PHYLLIS NYSTROM CHS Hedging Inc. acres below the USDA. The trade St. Paul has been dialing in a 1.5 million to 2.25 million acre reduction from the USDA estimate. Unwinding of corn-bean spreads was cited as a factor in late-week strength, but December still closed lower for the week. Corn yields are nearly universally better than expected as harvest expands beyond the 4 percent complete reported as of Sept. 15. Weekly export sales at 17.2 million bushels were neutral to low versus expectations. This brings total commitments to 31 percent ahead of last year. The USDA, however, is forecasting exports to grow by 67 percent this year. Weekly ethanol production fell 10,000 barrels per day to 838,000 barrels per day. Ethanol stocks dropped from 683 million gallons to 680 million gallons. It doesn’t pay to import Brazilian ethanol into the United States as Brazilian prices have risen and U.S. corn prices have declined. Imports were a mere 1 million gallons versus 4 million in the previous week.
The livestock markets have either been erratic or mundane as of late depending on whether it be the hog market or the cattle market. The hog market is the culprit of being erratic of late as prices have been either up or down sharply over the past few weeks. The cattle market has continued in a quiet and narrow price range in that same two-week period. On Sept. 20, the U.S. Department of Agriculture released the Monthly Cattle on Feed Report which indicated the following: onfeed Sept. 1, 93 percent; placed during August, 89 percent; marketed during August, 96 percent. This report was seen as positive for JOE TEALE cattle prices as placements were Broker much lower than analysts had Great Plains Commodity Afton, Minn. expected as well as the marketing number greater than anticipated. This could help the cattle market break out of the trading range that has persisted over the past several months. Of course this information is just one side of the fundamental equation. The supply side is the other side of the equation and the demand side continues to languish. Beef cutouts have rallied over the past month and the domestic boxed beef movement continues to be relatively slowed in comparison to previous years. Export business has been sporadic and overall better than last year. Combined the demand for beef at higher levels would have to be questionable given the current economic conditions now and in the foreseeable future. Therefore if beef prices advance much more from current levels, look for more pressure on the volume of beef products in the months ahead. Producers should not become overly optimistic to the point of not protecting inventories when available.
See NYSTROM, pg. 26A
See TEALE, pg. 26A
If the uncertainty of the weather and the volatile markets had you waiting to sell your corn this year, you are not alone. The delay in forward selling by most farmers will lead to unusually heavy selling pressure as harvest progresses. Even with the recent slight decrease in corn yields by the U.S. Department of Agriculture, this year’s corn crop is large and farmers will need to move large amounts of their grain at harvest. For 2013, the third week in September clearly illustrates the harvest pressure the corn market is just starting to feel. The USDA has updated the prevent-plant acres to 3.57 million acres GLENN WACHTLER of corn and 1.69 million acres of soyAgStar Assistant VP beans. Many of these acres are Financial Services Baldwin, Wis. located in the prime growing areas of our country. To a large degree, the corn market has shrugged off news that this could cause an increase in prices. On Sept. 18, the Federal Reserve tried to breathe some life into the asset markets by extending their $85 billion per month bond buying program. The grain markets rallied briefly, but failed to see much follow-through on Sept. 19. By now, the markets have also had time to absorb the impact of limited rainfall over late summer and corn yields have been higher than expected in the South. The bottom-line in the corn market is that it has been tough for prices to gain any momentum and break the downward-trend in prices. Until now, most producers have had a floor with respect to the minimum revenue per acre provided by their crop insurance revenue plan. For the Upper Midwest, that protection expires at the end of the See WACHTLER, pg. 26A
Focusing on the market
<< www.TheLandOnline.com >> “Where Farm and Family Meet”
Information in the above columns is the writer’s opinion. It is no way guaranteed and should not be interpreted as buy/sell advice. Futures trading always involves a certain degree of risk.