12-03-2012 06:27 AM - edited 12-03-2012 02:57 PM
Here we go -- read 'em and weep!
Thanks for hanging in with the B-Team today! See you again tomorrow! Get after 'em!
An old college classmate and friend of mine out in western Kansas sent me this today. Man, what a rough situation out there:
"The stands are very thin and the roots are weak and underdeveloped, which raises the risk of winterkill and blowing fields. We’ve even had to postpone traveling for the foreseeable future because if the fields start blowing, we have to get out there with the chisel to turn up clods and break the wind. We already have the chisel hooked up to the tractor just in case. It’s that serious. The wind today is supposed to get up to 36 mph and our wind threshold is about 40 mph, so we’re out checking fields today. Adding insult to injury is the darn price of wheat!! It’s pretty frustrating to see the market so unresponsive to a crop that’s in serious trouble and getting worse by the day. And, there’s no precip in the forecast, so it looks like we’re pretty much surrounded and the cavalry ain’t comin’. Unless something changes soon, we’re getting mentally prepared for what could be a pretty horrid winter."
Did a little poking around here and found some info that confirms most all of the world's major wheat-growing regions are hurting in one way or another. Check it out here. The big winner here could be India -- they may be the ones picking up a lot of the business that folks like Australia and Russia can't get done. One trader also told me that the Egypt buy of U.S. wheat last week is a big deal and shows that we could be entering a time when we could see a lot of tightening in the world market, especially if folks like Egypt are coming to the U.S. to buy wheat (last week's sale was the first time they've bought from us this year).
So, it's almost like wheat's that one hot Christmas toy of the year and everybody's running from store to store trying to buy it and when they do find it, they stampede the place like cattle!
Hey, back to today's prices: Corn and wheat have peeled back from those stronger earlier gains, but soybeans are still leading the way. Is it because of the word earlier today about China rushing to fill some end-user needs for beans and soybean oil right now? Sort of strange that wheat's still riding right along with corn in spite of all the news out today about wheat crop conditions around the world. How long will it take for the 2 to decouple from one another? Or, will that happen at all?
More in a few...
Well, the gains from earlier are sharpening and it looks like the open outcry session's going to see things continue upward: Right now, March corn's 7 1/2 higher at $7.60 1/4, January beans are 18 1/4 higher at $14.57 and March wheat's 10 1/4 higher at $8.73 3/4. Remember to tell Mike it's all because of the B-Team when he gets back next week!
Got this photo from my friend in Argentina -- this is the storm that just blew through his area and brought rain last night into this morning. He said their soils are "heavily loaded" with moisture and all the rain's "generated many drawbacks." Amazing to see somewhere in the world having this problem, as dry as it is here!
Good morning, everybody! Well, Mike's out this week, so you're stuck with the B-Team again. But hey, just glancing at the markets so far heading into today's trade, I guess I better start taking credit for these higher markets! As of 5:49 this morning, the March corn futures contract was 7 1/2 cents higher at $7.60 1/4 per bushel, while January soybeans were 16 1/4 higher at $14.55 and March wheat was 9 cents higher at $8.72 1/2.
Sounds like it's weather all-around: Folks are concerned about rainfall delaying Argentina's wheat harvest and corn and soybean plantings, and it's still super-dry in Russia, it sounds like. Those worries look to be underpinning prices. Also, sounds like some end-users in China are filling some soybean inventory needs, so that tech buying's is adding to the overall strength as we head into Monday.
So, what else is cookin' this morning? Here's a report a lot of us probably expected but are finally seeing somebody actually say it. Elwynn Taylor says full soil moisture recharge isn't likely in time for next year's crop. Is everybody as *not* surprised as I am?!
But hey, I'm still excited after the Wildcats took care of the Longhorns Saturday night and won the Big 12 championship and are headed to the Fiesta Bowl. For all you Husker fans here, you have my condolences...
Hey, stick around with the B-Team today! Everybody have a good one! More in a few...
12-03-2012 06:44 AM
Morning Jeff ! You are kidding about Elwynn arn't you ? LOL I read that article and my first thought was --( sorry here ) No Chit Elwynn !
Second - just wonder if we will have a report from PalorPit this morning after my Colts took apart the Loins Or was that kittens yesterday !
Everybody have a great day , pretty busy here , headed for the 70's so looks like agood day to lay at the pool and work on my tan !
Hey Jeff if I sent you my cell # could you just call me with updates on Marketeye so i don't have to come in? lol
12-03-2012 06:49 AM
Another news item I heard over the weekend is too wet in England and they have only been able to plant 25% of their expected wheat.
Not sure how that impacts all the markets but anytime we have less somewhere it makes some difference in the grand total production.
12-03-2012 07:38 AM
12-03-2012 07:56 AM
Read Taylor's article. If it makes the market go up thats fine. But we might have a way worst yield of 122/ac next year. Out here we had a really bad years in 2002 and 2003, but the corn yield was better in 2003. They also fired Frank Solich that year. It hasn't been the same since.
I'm glad for K-State, The Huskers get to go to the Capitol One Bowl,,,,,,,,,,,,,,and play Georgia............You all ain't seen nothing yet!!!!
Argentina's wheat is that used for milling or feed? I just wondered if all the rain is going to make more "feed bushels" on the market?
12-03-2012 08:59 AM
Just did a little digging on this, Canuck, and found these numbers from the HCGA (the industry organization for cereal grains in the UK):
"With a 13% reduced production and an estimated 7% increase in domestic demand, supply of wheat from the UK will limited with current estimates in the latest AHDB-HGCA Balance Sheet putting export availability at an historic low level of
just 750,000 tonnes."
So, you are definitely on to something there with the world supply of wheat. Certainly puts a lot of pressure on eastern Europe and South America, both of whom we've already highlighted have big-time problems of their own. This wheat situation sure could get dicey...
12-03-2012 09:00 AM
With the wheat deal I am entertaining the idea of selling some corn I have left at the $7.50 local cash prices, Its almost there this morning. If world end users can buy feed wheat cheaper then corn, they will.
Does anyone reading this think we'll see $8.50 corn on the board without a major weather problem in South America.
12-03-2012 09:04 AM
Also just heard from a friend in Argentina. He said it started raining where he is (just west of Buenos Aires) last night and it's still raining this morning. He said it's a major rarity for rain to delay both small grain harvest and corn/soybean planting at once like this. Said they're not yet started on wheat harvest there (still on barley), but harvest is underway north of there and he said yields and quality are both not very good.