07-30-2012 06:08 AM - edited 07-30-2012 04:23 PM
After the close:
USDA announces that the 2012 U.S. corn and soybean crop conditions fall another 2%. Corn is now rated as 24% good/excellent and soybeans 29% good/excellent. See analyst reaction story.
"The states that were hardest hit this week were Minnesota (down 5%) and South Dakota (down 4%). Illinois dropped down to 5% good, and zero percent excellent. I think that is the lowest corn rating ever for Illinois. Iowa continues to drop and was down 3%, to just 20% good to excellent," says Al Kluis, Kluis Commodities.
At the close:
The Sep. corn futures closed 21 cents higher at $8.20, while the Dec. contract finished 20 3/4 cents higher at $8.14. The August soybean contract finished 41 1/2 cents higher $17.25 3/4, Nov. futures finished 41 3/4 cents higher at $16.43 1/2. The Sep. wheat futures closed 16 1/2 cents higher at $9.14 1/2. Aug. soyoil futures settled 0.53 higher at $52.57. The Aug. soymeal futures finished $18.60 higher at $546.30.
In the outside markets, the NYMEX crude oil is $0.42 per barrel lower, the dollar is higher and the Dow Jones Industrials are 3 points lower.
The Sep. corn futures are trading 19 1/4 cents higher at $8.18 1/4, while the Dec. contract trades 20 1/4 cents higher at $8.13 1/2. The August soybean contract is trading 31 3/4 cents higher $17.16, Nov. futures are up 35 cents at $16.36. The Sep. wheat futures are trading 13 1/4 cents higher at $9.11 1/4. Aug. soyoil futures trade $0.41 higher at $52.45. The Aug. soymeal futures are trading $12.80 higher at $540.50.
In the outside markets, the NYMEX crude oil is $0.40 per barrel lower, the dollar is higher and the Dow Jones Industrials are 20 points lower.
At the open:
The Sep. corn futures opened 16 3/4 cents higher at $8.15 1/4, while the Dec. contract trades 18 1/4 cents higher at $8.12. The August soybean contract is trading 36 1/2 cents higher $17.20 3/4, Nov. futures are up 41 3/4 cents at $16.43 1/2. The Sep. wheat futures opened 15 1/2 cents higher at $9.13 1/2. Aug. soyoil futures trade $0.47 higher at $52.53. The Aug. soymeal futures opened $14.70 higher at $542.30.
In the outside markets, the NYMEX crude oil is $0.20 per barrel higher, the dollar is higher and the Dow Jones Industrials are 36 points higher.
Notes of interest:
Japan's Ag Ministry announced that the Jan.-May corn imports resulted in 6.51 mmt, slightly above a year ago. Here's where it gets interesting. While 85% of those imports came from the U.S., this year's U.S. piece of the Japan corn import pie ie expected to fall due to South American corn going to Japan.
--On Wednesday, FC Stone Inc. will release its Crop Survey results.
Early calls: Corn 18-20 cents higher, soybeans 34-36 cents higher, and wheat 16-18 cents higher.
Overnight grain, soybean markets=Trading sharply higher.
Crude Oil=$0.01 per barrel lower.
Wall Street=Seen opening lower. Keep in mind that the Federal Reserve meets this week. Some economic support measures could be announced.
More in a minute,
07-30-2012 06:11 AM - edited 07-30-2012 06:12 AM
Even with some rain in the Midwest, the farm markets are sharply higher. This is impressive. Take a look at this morning's weather radar, according to Freese-Notis Weather Inc.:
What's moving these markets?
07-30-2012 06:20 AM
Mike, I was just wondering, what are the traders thinking this morning on corn and soybean yields? I know it's a moving target and it needs to be updated every couple of days. It seems obvious that they are looking for another lower conditions report today. Just how much lower? Thanks for all you do!
07-30-2012 06:29 AM - edited 07-30-2012 06:53 AM
Thanks for the kind words. I really appreciate them. I'm learning that the trade wants to see if corn can take out the Sep. corn futures high of $8.28. With disappointing rains over the weekend and more hot/dry in the extended forecasts, weaker conditions expected in this afternoon's USDA Crop Progress Report, and the calendar reading July 30, the markets are well supported. One analyst put it so succinctly, lately. "Can demand get cutback faster than the fall in crop conditions," he asked.
07-30-2012 06:42 AM
The rains had very poor coverage and the corn is turning 30 days early. It is just out of gas in many areas and there are some reports out there of the truth of what is going on with this years feed grains crop. Kind of like the last South American crop. Too many disbelievers till too late.
I would like to know what % of the actual production from much of the main corn growing areas is presold @ the $5 area. Free stocks may not be as great as assumed. Importing countries may be very nervous and the over night trade here last night tells me somebody may be trying to put a lid on their exposure to a deal like the wheat a few years ago.
This is getting to be VERY HIGH finance. My advice to to be very careful with deferred pmts etc. Put nothing on deferred pmt you can't live without if it were to go away. Keep things at home or on warehouse reciept.
07-30-2012 06:49 AM - edited 07-30-2012 06:51 AM
Speaking of being nervous. With billions of dollars of crop insurance set to be paid out this year, do you remain confident that you will get your check in time to pay your bills? Just curious. Or, are your bills spread out enough (by date) that a late crop insurance check would not be a concern. I know this is looking ahead a bit. But, I talked to a few farmers, over the weekend, that are already having these discussions.
07-30-2012 06:50 AM
I thought I would paste my bean note here, since I think we are 30 days ahead too:
So, it looks like my garden grean beans may be a near-total loss. Just one picking of a bean or twoper plant, I have them all mulched with grass clippings, but the heat was just too much. Just HUNDREDS of blossums and aborted baby beans on the ground.
Sooooooooo, I got to thinking about the asgrow 1832s out in the field. On the way to the field, I stopped at an asgrow plot. The 12s and 14s maturity were loaded with pods. Then it pretty much stopped.
I checked every later variety and they were free from any pods.
Now I know, everyone is going to say, we don't make beans till august, but check out the calendar boys. Oh, and it seems with all the heat, everything else is about a month ahead of schedule, so where are the beans?
07-30-2012 07:06 AM
Many of the beans are going to make the corn story a back burnner issue without a rain this week.
The district rep and I looked at mine just this last Friday and they are done blooming under the canopy and there is just a few more days left between 15 and 50 in the field we checked. The abortion stage is upon us. Rain now were his words. This mornings fog isn't going to do it and no rain this weekend down here either.
I believe most insurance co's are going to start out doing the best thay can. Drive around and look at the work load they will be under. Be nice to your adjuster...it isn't his fault it didn't rain. Going to be hard for him to get the paper work done with everybody calling every 15 minutes disrupting his train of thought and progress on the claim just ahead of yours.
I'm defering any crop insurance claim income to next year anyway so ....
07-30-2012 07:07 AM - edited 07-30-2012 07:14 AM
Those fed minutes are gonna be fun to read. And if they do feel up this er I mean stimulate this economy My guess is another 50 cents to a dollar on the corn price. BUt if you wanna keep cheap interest get er done before the election. as this round is gonna bring the interest monster with it.
As the worst drought in the Midwest in more than 50 years tightens its grip, consumers should prepare to start paying more at the grocery store.
Prices for beef, poultry and milk are all projected to go up.
Last week the U.S. Department of Agriculture released its latest food price outlook, estimating that the consumer price index for beef will increase 3.5 to 4.5 percent this year and another 3 to 4 percent in 2013.
The drought has destroyed corn and soybean crops and sent prices surging, increasing feed prices to the point that many farmers are choosing to sell their entire herds.
Peter Whisnant, owner of Fruitland American Meat, whose family has raised cattle in Southeast Missouri for generations, said he's never seen anything like this drought. Southeast Missouri is now in the most severe category on the U.S. Drought Monitor: exceptional drought.
"We've had such a light winter and a dry spring, nobody got to make hay. It's been so hot, we've run out of pasture and we've run out of water. There's just nothing out there," Whisnant said.
In the short term, this sell-off is flooding the cattle market and will temporarily hold beef prices steady or slightly lower them, Whisnant said. Feeder cattle prices have dropped 10 percent in the last month to $1.36 per pound.
"Missouri is literally selling out all of its cattle. They're leaving this part of the country, so in years to come, it will take a long time to build back up the cattle in Missouri," Whisnant said.
Come next year, people can expect beef prices to skyrocket, he said.
"It's so drastic. I don't think people who aren't in the farming business realize how drastic this drought is," he said.
Forty-five percent of the U.S. corn crop is either in poor or very poor condition, according to the USDA's latest Crop Progress Report.
Corn prices have gone up 23 percent in the past month to above $8 a bushel last week. Soybean prices have jumped 12 percent in the past month, getting up to $17.50 a bushel, according to the Chicago Board of Trade. The full effect of the increase in corn prices for packaged and processed foods, such as cereal, will likely take 10 to 12 months to move through to retail food prices, according to the USDA.
For now, grocery prices are holding steady, said John Townsend, co-manager at Schnucks in Cape Girardeau.
"There's going to be an impact, there's no doubt. All you have to do is look in the grocery store on the labels to see how much corn is in everything," he said. "It may be ugly."
In addition to beef prices, Townsend expects poultry and pork prices to increase, too, because the main ingredient in their feed is corn.
The USDA's consumer price index for pork is expected to increase 2 to 3 percent this year and 2.5 to 3.5 percent next year. Poultry prices will go up 3.5 to 4.5 percent this year and another 3 to 4 percent in 2013.
Dairy products are forecast to rise 2 to 3 percent this year and 3.5 to 4.5 percent next year.
Prices for fruits and vegetables will go up 2 to 3 percent both this year and next, according to the USDA's consumer price index.
Townsend said the drought has already made it difficult to get good quality produce.
"We're a proud retailer who loves to do business with local farms. Eckert's Peaches, from Belleville, Ill., has been in our circular for the past two weeks, but the peaches we have are very poor. They're very small because they're heat-affected," he said.
Produce has a hard time ripening in extreme drought conditions because it can't get the moisture it needs.
"We're getting about 10 percent of what we order and the quality is very poor, but we're trying to help a local farmer stay in business by offering their product," Townsend said.
Grocers all across the country are trying to find ways to reduce their operating costs, in an effort to keep their prices down, he said.