October 25, 2012
Producer Marketing Manager
Corn: As of 7:35 Down 2
As we put the finishing touches on another harvest season, we pause to give thanks and revisit what key influences and decisions had the biggest impact on this year’s outcome. For some the outcomes were record breaking and for others they may have been disappointing. Of course we know we can’t control Mother Nature, but we are able to employ strategies and tools to mitigate some of those risks. Looking ahead to the next growing cycle we ask ourselves, how do those past decisions factor into the decisions that lie ahead? Many outside factors are unknown at this point and for now we have to use assumptions (2013 weather, Chinese demand growth, world production, etc). Here is what we do know: price levels are encouraging more acres of both feed grains and soybeans to be planted around the world next year, the market has rationed the small US crop this year, and subsequently has the domestic livestock industry contracting in size. As you weigh these factors, make your input purchases, and run thru your break evens, I would encourage you to take a look at New Crop 2013 corn prices. We have traded up into the $6.40’s area this week on the Dec 13 contract with contract high of $6.65 make back on Sept 7th.
Soybeans: As of 7:35 Down 3
Much of the chatter has focused on S American weather. Dry and very warm weather will continue in Central and Northern Brazil through the next 6-8 days. Adverse soaking rains will continue in Argentina and Southern Brazil into the middle of next week. An improved pattern (wetter in C and N Brazil, drier in Argentina) is still forecast in early November. Interesting to note that US Broiler Egg sets were at a record low this past week as they scale back production on poor financial returns.
Wheat: As of 7:35 MPLS Down 4, KC Up 1
After a couple head fakes yesterday on whether or not Ukraine would limit exports, the Ukrainian AG ministry confirmed that wheat exports will be banned as of November 15 and that no more than 5 MMT will be exported this year. They have shipped 4MMT of that total so far. This would open a window for potential US wheat exports after the first of the year and staying open until the Australian new crop starts to hit the market. The wheat market has been range bound since harvest and we are now trading into the upper end of that range. The chart below is the KC March 13 contract.