06-24-2013 06:56 AM - edited 06-24-2013 03:43 PM
Rabo AgriFinance talks with Marketeye about their latest study on farm markets. I hope you have a minute to digest the information. Offer up your thoughts on the financial firms findings, would ya? Thanks
Monday's Crop Progress Report:
--USDA rates U.S. corn 65% good/excellent and 96% emerged.
--USDA sees 81% of U.S. soybeans as emerged and 92% of the crop planted.
The report is seen as negative for corn, 1% better rating than last week. For soybeans, the report is seen as friendly for tonight's market action. There are still a lot of soybeans that have not emerged. And the report is slightly negative for wheat prices, tonight, one analyst is saying.
At the close:
The July futures corn contract closed 9 cents lower at $6.53. New-crop Dec. corn futures settled 10 cents lower at $5.46. The July soybean futures contract ended 18 cents higher at $15.12, new-crop Nov. soybeans closed unchanged at $12.73. July wheat futures finished 19 cents lower at $6.79 per bushel. The July soymeal futures settled $3.30 per short ton higher at $451.00. The July soyoil futures closed $0.47 lower at $47.55.
In the outside markets, the NYMEX crude oil is $1.30 per barrel higher, the dollar is lower and the Dow Jones Industrials are 50 points lower.
The July futures corn contract is 7 cents lower at $6.54. New-crop Dec. corn futures are trading 9 cents lower at $5.46. The July soybean futures contract is trading 2 cents higher at $14.95, new-crop Nov. soybeans are trading 10 cents lower at $12.63. July wheat futures are trading 19 cents lower at $6.78 per bushel. The July soymeal futures are trading lower. The July soyoil futures are trading $0.55 lower at $47.47.
In the outside markets, the NYMEX crude oil is $0.09 per barrel lower, the dollar is higher and the Dow Jones Industrials are 217 points lower.
One analyst says the farm markets are pressured by macroeconomic factors Monday. "The Chinese market down over 5% this morning certainly didn't help. Capitulation from the rising interest rates has brought some money out of commodities as well. The temps were cooler than expected over the weekend and the two week outlook looks favorable in our opinion. These bear factors are all contributing to today's break but we also believe that too much risk premium has been priced into grains and oilseeds anyway."
At the open:
The July futures corn contract is 7 cents lower at $6.54. New-crop Dec. corn futures are trading 11 cents lower at $5.45. The July soybean futures contract is trading 4 cents lower at $14.89, new-crop Nov. soybeans are trading 15 cents lower at $12.57. July wheat futures are trading 11 cents lower at $6.86 per bushel. The July soymeal futures are trading lower. The July soyoil futures are trading $0.39 lower at $47.58.
In the outside markets, the NYMEX crude oil is $0.14 per barrel lower, the dollar is higher and the Dow Jones Industrials are 131 points lower.
Early calls: Corn is seen 4-6 cents lower (old-crop), soybeans 4-6 cents lower (old-crop), and wheat 6-8 cents lower. Meanwhile, new-crop corn 8-10 cents lower and soybeans are seen 13-15 cents lower.
Overnight grain, soybean markets=Trading lower.
Crude Oil=$0.18 per barrel lower.
Wall Street=Seen lower, as China's weakening economy knocks all world stocks off balance.
World=Asia/Pacific stocks were lower and Europe's stocks are lower.
More in a minute,
06-24-2013 07:58 AM - edited 06-24-2013 09:02 AM
I watched the video. and yes I think market prices will move lower, function of prices is to regulate supply and demand. More supply lower the price goes to spur demand. At least that is what they want us to think. Prices go in cycles and this is the high end of cycle. Either way we are heading down in corn prices. What I find interesting is that there is going to have to be a "shake" out period where cash rents and land valued will have to fall, land cost are a major component to any crop budget.
I would have liked him to place a time period on demand reconstruction. Once someone gets use to doing something else its going to take awhile to change their habits. That goes the same for crop rotation. Farmers have gotten use to planting corn and honestly if you can get $5 for corn, that still might be better then $12 soybeans ( I used the 2.5 ratio for corn and soybean prices.) your better ground east of where I'm living might still be planted to more corn. Land values aren't the only thing that will have to back off, Will John Deere lower their combine prices, or tractors? Well fertilizer companies take a little less on their products? If these area's don't come down then there are going to be major problems in the ag sector. And all of this is coming during a time of what I'm assuming will be higher interest rates,,,, and higher dollar values in the world markets.
Corn prices are coming down. In my own opinion I think the $4 mark on the futures should hold the bottom end, and honestly I don't think we will get that low this year or the next. soybeans probably won't go below $10,,,but all bets are off,,,,
talk of hillary running for the high office,,,,,,,,,,,,,,,,,,,,
I was reading some other post and even if we do just raise 150 bushel national average, that still doesn't pencil out to $8 corn or even $7 corn for next year. We have ethanol eating around 4-5 million bushels a years. and the animal industry is doing what ever it does to stay alive, I myself haven't feed any rolled corn in several years. I feed DDGS and then I screen my corn when I place it in the bin in the fall and feed that which amounts to not very much corn an acre, and I'm feeding soyhull pellets now, other feed lots are feeding WDGS, that have more capacity.
and we have no exports for our corn.
Has the June acreage report ever been bullish??
06-24-2013 08:25 AM
Good follow up Mike
The film was good and an explanation worth going after Mike. It was obvious his time frame is also longer than the next three months. And in the context of time, he is stating the natural low of the market.
I was interested in his view of where breakeven is. $5.25 area as I remember.
Rabo is as well versed with production costs as a lender should be.
ego addiction -------- giving her a "Margaret Thatcher" moment?-----------------
06-24-2013 08:30 AM
Iowa is saving the Mississippi all on its own.
Need that rain to get Rabo's South American cheap corn up the river to those Iowa ethanol plants???????
I can barely remember a time when we were sick of rain, but hobby and the rest of you gotta be getting there.
06-24-2013 09:20 AM
Good video. It's about time someone said our breakeven costs are much higher than a decade ago. I now have over $150 an acre in nitrogen cost and $90 an acre in seed cost. Cash rents will take awhile to come down since crop insurance will guarantee a positive cash flow until next year. Land prices will fall only when cash rents fall and interest rates increase. This may take awhile.
If cash corn does drop to $4 will ethanol plants have the ability to increase production? They've been paying $6 a bushel for corn and still making money so if corn goes to 4 won't they put out more ethanol? Gas prices at $4 a gallon could make e 85 look attractive at the pump. I don't think we'll see $4 corn for this reason. The insurance price guarantee for next year will tell the story about how much corn will be planted. We could see more hay than we have in the past few years. Some of the horses around here are looking pretty scrawny. Used equipment will be abundant. Dealers have more than enough inventory to last if the corn price drops. The equipment market won't be as fat as it has been the last couple years. Farmers have geared up and won't be trading combines so often if grain prices fall.
Hillary for president? The bad news is that when she was a New York senator she never favored ethanol. Being an Illinois senator, Obama knew how his bread was buttered. He used to drive two and a half hours from Chicago to the state capitol through one big cornfield. We've had a good run the last couple years but it might be coming to an end.
06-24-2013 09:36 AM - edited 06-24-2013 09:39 AM
It looks like the Supreme Court just helped out the image of the ethanol industry.
Here is the link to this morning's Dow Jones Newswire story: Supreme Court decision supports ethanol.
By the way, here is the expected response from the Renewable Fuels Association:
RFA President and CEO Bob Dinneen commented on the Supreme Court decision not to take up the Petroleum Industry’s E15 Appeal:
“I am pleased that today’s Supreme Court action ends a long and drawn out petroleum industry effort to derail the commercialization of E15. The uncertainty created by this lawsuit has chilled commercial activity that would provide American consumers more affordable choices at the pump. With this decision, E15 can finally become a meaningful option for more Americans.”
What do you think?
06-24-2013 10:10 AM
What do I think? I think the oil industry will try as many ways as it takes to kill ethanol......they have deep pockets. These same oil companies would rather see young Americans killed protecting their $$ than serving the American people with affordable fuel that keeps millions of American people working.
06-24-2013 10:32 AM - edited 06-24-2013 10:33 AM
I find it interesting that we are talking a lot about below breakeven grain prices ahead, yet farmland prices remain hot. Here is an announcement of an auction I received this morning. Also, it's been confirmed, by some of my farmland 'insider' sources that sellers of farmland are turning right around and renting land, willing to sit in the bushes and wait for a 'land bubble', only to scoop up what they can with the money they have been sitting on. What do you think? Now here's the farmland auction announcement from the eastern Corn Belt:
The auction of 1,035 acres of Indiana and Illinois farmland drew a standing-room-only crowd of approximately 250 people Tuesday, resulting in active bidding and strong prices.
Most of the tillable cropland sold to investors at prices reaching $8,373 per acre in the auction, which was managed by Schrader Real Estate and Auction Company.
"Farmers and investors alike were actively bidding, and during the past few months, farmers have been prevailing. But in this case, most of the cropland went to the investors," said Gene Klingaman, executive vice president of Schrader. "This exceeded our expectations and demonstrates what we've been seeing for quite a while now -- that demand for farmland remains high among investors and farmers alike," he said.
Joe Bubon, executive vice president of Murray Wise Associates, agreed. "There isn't a lot of supply of available farmland, so a property like this one that is more than 80 percent tillable is very attractive. I think we'll continue to see strong farmland prices, because there really aren't a lot of alternatives that combine the return and stability, especially with the recent volatility in stocks and bonds."