News updates, I've looked around for..
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After good planting progress in much of the Western Corn Belt, growers halted fieldwork when heavy rains pounded much of the area late last week. Iowa and Minnesota fields were soggy as the rains continued throughout the weekend.
Lagging seriously behind in corn planting are growers in Ohio and Indiana. USDA reported
only 11% of the Ohio corn crop is in the ground. A week earlier, just 7% was planted. The 5-year average for corn planted by May 22 in Ohio is 80%.
Indiana growers were able to do more fieldwork. Planting estimates went from 29% of the Indiana corn crop in the ground last week to
49% planted by May 22. The average for this time of year is 76%.
Iowa corn growers led the Midwest for planting,
with 98% of the corn crop done and 78% of soybeans in the ground by May 22. Iowa corn is out of the ground, too. USDA
reported 74% is emerged.Growers in Minnesota made up lost time by getting
81% of the corn crop in the ground. A week earlier, only 47% of the state's corn was planted. Just 23% of the corn is emerged.
Soybean planting got a good start with 38% in the ground, compared to only 9% a week earlier. Good weather certainly increased the percentages early in the week until the rain started.
In Illinois,
69% of the corn and 16% of the soybeans had been planted by May 15.**************************************************************
Quote:
The deadline on crop insurance for prevented planting looms. Growers who are unable to plant corn due to wet fields will need to decide soon if planting late will pay more than filing crop insurance for prevented-planting cause.
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The deadline for deciding to plant row crops or take prevented-planting payment on crop insurance is approaching. For growers who farm in the Midwest and upper Midwest, May 31 or June 5 is the deadline for making this decision.
And growers need to be cautious about their decision because prevented planting could offer more return than planting corn, according to Gary Schnitkey, ag economist, University of Illinois.
“Corn planted at this point in time will likely have lower yields than normal,” Schnitkey said. “This makes taking the prevented planting look like an attractive alternative. And, in our calculations, taking the prevented-planting payment on corn almost always looks better than planting soybeans. You have to get fairly high yields on soybeans in order to make it comparable.”
Schnitkey developed calculations to help farmers choose the best option with the best net return. In one calculation, he used $6.40 for harvest time price for corn and $13.30 for soybeans. In this scenario, the prevented-planting payment net of cost with an 80% coverage level was $400/acre. The net returns for planting corn came in at $375/acre and planting soybeans at $363/acre. So, at the 80% coverage level, taking the prevented-planting payment was $25/acre higher than for planting corn. For soybeans, it was about $30 higher than planting.
“We used $6.40 for corn,” he explained. “But if corn prices go up, planting corn might have a better return. If the price of corn goes down, taking the prevented-planting payment will be the better option.”
Another factor affecting farmers is that many of them may have chosen lower crop insurance coverage levels than last year. “Prevented-planting payments go up with higher coverage levels, so at 75% coverage, 80 and 85% will have higher prevented-planting payments. Making those calculations will be critical,” he said.
Farmers may ask if the nitrogen fertilizer they already applied to their fields can be included in the calculations. Schnitkey said it can’t. Only costs not yet incurred can be included.
Until the deadline, Schnitkey recommended that growers plant corn if they are able to plant. But a grower “can’t decide now not to plant, up to the final planting date.”
http://www.farmdocdaily.illinois.edu/201....***************************************************************************
Prospects for Corn Acre Losses in 2011
As of May 22, 79 percent of corn has been planted in 18 states that account for 92 percent of corn production in the United States. The 79 percent is near the average from 1980 through 2010. Two areas have low percent plantings: the eastern Corn Belt and the upper Midwest. In these two areas, it is unlikely that other crops such as soybeans will compete for corn acres. However, some farmers may take a prevented planting payment from crop insurance once the final planting date has been reached, thereby reducing the number of corn acres planted in 2011.
The National Agricultural Statistical Service (NASS) prepares Crop Progress reports that give percent of corn acres planted for 18 states that account for 92 percent of corn planted in the United States. In the May 23, 2011 report, 79 percent of the corn acres are reported as being planted in the 18 states for the week ending on May 22. From 1980 through 2010, the average percent planted by this time is 81 percent (see Percent Corn Planted graph below). Hence, the 79 percent for 2011 is near the average for the past 31 years. The near historical average for corn planting suggests that corn acres may not be lost in 2011. However, weather and planting progress over the next two weeks likely will have a large impact on acres planted in 2011.
Two areas have the least amount of crop progress: the eastern corn-belt and the upper Midwest (see nearby map). In the eastern Corn Belt, Ohio has 11 percent of its corn acres planted, the least of the 18 states. States surrounding Ohio also have low progress: Indiana (49 percent planted), Michigan (57 percent), Pennsylvania (40 percent), and Kentucky (62 percent). In the upper Midwest, the following states have relatively low percent planted: North Dakota (49 percent), South Dakota (73 percent), Minnesota (81 percent), and Wisconsin (63 percent).
To translate crop progress into acre totals, prospective planting acres contained in the March 2011 Prospective Planting Report by NASS have been multiplied by one minus percent corn planted. This multiplication gives estimates of acres by state that have not been planted yet. There are eight states with over one million acres of corn that have not been planted by May 22nd:
Ohio – 3.3 million acres
Indiana – 2.0 million acres
Minnesota – 1.5 million acres
Wisconsin – 1.5 million acres
South Dakota – 1.4 million acres
Illinois – 1.3 million acres
North Dakota – 1.3 million acres
Minnesota – 1.1 million acres
Ohio and surrounding states total 8.7 million acres that have not been planted. Upper Midwest states total 5.5 million acres that have not been planted.
It is unlikely that many of the acres that still have to be planted to corn will be planted to other crops. In the eastern Corn Belt, for example, soybeans could be planted rather than corn. However, current market prices cause returns from corn production to be projected higher than soybean production if planting occurs in May.
What may take acres out of corn production are farmers taking prevented planting payments from crop insurance. Once a “final planting date” has been reached, acres can be declared as prevented planting and farmers will receive prevented planting payments if they do not plant a crop within a prescribed period (see here for more details on prevented planting). These prevented planting payments may be higher than expected returns from either planting corn or soybeans. Hence, prevented planting payments could take corn out of production. Comparisons of prevented planting to planting corn after the final planting date will be more fully described in tomorrow’s farmdoc Daily post.
Prevented planting will not compete for corn acres until after the final planting data has been reached which varies from May 31st through early June for the Corn Belt and the upper Midwest. A great deal of planting can occur before the final planting date is reached. Therefore, it is quite possible that most acres planed for corn will end up being planted to corn.
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Got corn? You're golden
CHICAGO, Illinois (Agriculture.com)--Already sold out of the majority of old-crop corn, Midwest farmers face a dilemma of marketing portions of this year's crop that is being planted late with threatened production potential.
Though farmers in western Corn Belt states are nearing completion of corn planting, at least 7.0 million corn acres are estimated to be unplanted in states in the eastern Corn Belt and the Dakotas.
For farmers that are not finished planting, this scenario leaves them hesitant to sell a crop not yet in the ground, while others see the market potential if the U.S. doesn't reach USDA's expected 92.0 million corn acre estimate.
Heading into Memorial Day weekend, commercial users of corn are already having a very difficult time in sourcing July or August supplies, analysts say. Yet, more signals indicating farmers are either mostly sold-out of last year's corn, or are staying on the sidelines waiting for increased prices.
Old-crop vs. New-crop
David Hillard, Consolidated Grain and Barge Co. (CGB) grain merchandiser, says farmers seem to be waiting to sell any new-crop corn. In addition, truck traffic, for old-crop sales at the CGB facility near Princeton, Illinois, has been very light, Hillard says.
"A lot of these guys are waiting to see if their late-planted corn is going to come out of the ground before selling it. Plus, with tight stocks, many farmers are expecting the value of this corn to go much higher," Hillard says.
Some contracted grain is moving, but new sales have been awfully quiet, he says.
Because ethanol plants continue to buy supplies, farmers who sell into that market are seeing strong prices. "The domestic corn market is better right now than the export market. That is another reason why a facility like ours is seeing less traffic," Hillard says.
An Agriculture.com Marketing Talk member using the handle “Nebrfarmer” says ethanol plants in his area are buying new-crop, but are well supplied with old-crop corn. "I have some $4 corn to deliver to them now, and was told by the plant's dispatcher not to feel too bad, as over half the corn coming in for this year is at or below $4, and probably three-fourths or more for the rest of the year is under $5."
Katy Greiner, president of Kat's Grain in Washington, Iowa, says some new-crop sales are happening, but old-crop sales are few and far between. Even with a positive cash corn basis, farmers are gripping tightly to old-crop corn. "Anybody that has old-crop corn is holding onto it. They may be selling it in small pieces. But, yes, they are waiting for better prices."
Meanwhile, the trade is eyeing the expected 15-year low corn stocks scenario that could be realized at the marketing year-end date of August, 30, 2011. The belief is that come July and August, there will be very little corn around for the end-user to purchase. Because of late plantings and floods, the U.S. South corn crop, the first to hit the new-crop market, will not be ready to be harvested.
Joe Bedore, FC Stone Inc.'s CME Group trading floor manager, says farmers are not selling old-crop and little new-crop corn, knowing the tight stocks scenario.
"The talk constantly is that anybody that has corn on-hand is golden, "Bedore says. So, September is considered old-crop in the marketing world, this year. This means that if you have corn, it's going to be worth a lot. Therefore, I think farmers that have old-crop corn on-hand are not selling it."
Another Agriculture.com Marketing Talk member says he's willing to risk waiting for higher markets. "I am not selling now, waiting for $8 corn. A local ethanol plant is paying $7.78 cash, before today's market opens. I took someone's advice to wait for $8 corn or $4 corn, whichever comes first. Do you think I will hit $8 before $4?"
Some sales
The story is different for new-crop corn, Greiner says. "We have farmer-customers selling corn anywhere from $4.00 per bushel up. Yeah, those farmers that sold at $4.00 did so too early, but they did the same thing last year. The last time we hit that $6.75 per bushel price, to the farmer's pocket, we started to see heavier new-crop sales."
In southeast Iowa, an area that historically doesn't have a lot of old-crop sitting around because of multiple market, including livestock operations, nearby river terminals, ethanol plants, processors, and elevators, farmers have sold different levels of their new-crop. "In an attempt to take advantage of some recent rallies, we've seen farmers sell up to 90 bushels per acre worth of new-crop, while others have sold 30% of their production," Greiner says.
Farmers Wait for Planting Season End
Once the U.S. planting season, slowed by a wet spring, is finished, farmers are expected to resume selling new-crop corn, merchandisers say. "When Indiana and Ohio finally get planted, you could see some pickup in sales," Hillard says.
Greiner agrees that new-crop corn sales are dependent upon the last half of this rain-drenched planting season. "Farmers are aware of the global corn demand, the tight stocks, and the impact Ohio's dismal planting pace is having on the market. Plus, they may want to see how the pollination season goes before releasing new-crop corn. I don't think farmers will oversell like they did last year," Greiner says.
Dustin Johnson, EHedger broker, says some farmers are selling new-crop, depending upon the location of the farmer. "For areas that had timely planting, new-crop sales are happening. Obviously, the eastern Corn Belt farmers are too concerned about not having a very good crop this year. They are not selling. But, I'm seeing a lot of guys in Illinois pull the trigger. They have great basis and flat prices to sell into," Johnson says.
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(This Artical is dated by a couple weeks, though I thought it relevant to post..)
$12 corn: Crazy, but possible
CHICAGO, Illinois (Agriculture.com)--At this year’s Commodity Classic conference, at least one market-watcher suggested that a hiccup in the spring/summer crop-weather, causing reduced yields, would cut further an already 15-year low U.S. corn stocks supply, sending corn futures prices marching towards $12 per bushel.
Meanwhile, some CME Group floor traders have figured that, adjusted for inflation, it’s not unrealistic to believe corn should be closer to the $10.00-$12.00 range vs. $6.00-$7.00 per bushel.
As of this week, the July corn futures contract, the one that would see a $12 price first, traded within a $7.70-$7.72 range. So, is it really possible for the corn market to reach $12.00 per bushel?
Currently, a much slower-than-average planting season is raising eyebrows among traders and analysts. Plus, wet and cool weather conditions forecast for the Midwest through April are perhaps building further arguments for a significant corn market rally.
David Hightower, The Hightower Report co-owner, says corn and soybeans both have support to run sharply higher.
“We have to put this $12 corn price into context. As they relate to alternative fuels, with energy prices running higher, this pushes up corn and soybean prices.”
Energy prices are at four and sometimes five times their historic values, and sugar and platinum at eight times their historic values, Hightower notes. "So, $12 corn and upper-teens for soybeans are not irrational prices," Hightower says.
Hightower adds, "The fact is, these ag-markets are so closely tied together than ever before. For instance, if we have a drag in wheat prices, the already tight corn stocks situation will drag wheat prices up with a corn rally."
One CME Group grain floor trader, requesting anonymity, says $12 corn would only follow a weather scenario where you could prove damage.
“I think the March Planting Intentions Report, estimating 92.0 million corn acres, almost had enough to let us feel comfortable with trend yields, relieving worry of a shortage of corn,” the floor trader says.
Plus, Russia will have feed grains to harvest after July 1, propping up the world’s feed supply, he says. “We can still feed some SRW wheat that wet weather is making into more of a feed quality vs. food crop.
Still, rain is needed in HRW regions to keep wheat prices sideways, the Chicago trader says.
Gross dollars vs. $12 market
Don Roose, U.S. Commodities broker in West Des Moines, Iowa, says $12 corn is possible, but encourages farmers to watch their net and gross dollars per acre figure, not just market price.
“We don’t know what the ‘new normal’ corn price level is yet, because we are in a zero interest rate environment. “The cost of carrying goods can slow down a lot of commodity prices. We’ve had these high grain prices for six months. But, that could change dramatically, if interest rates jump,” Roose says.
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Market SnapShot
Corn Jul 11 760-0 +1-4
Soybeans Jul 11 1380-6 +1-0
Soybean Oil (P) Jul 11 58.61p -0.09
Soybean Meal Jul 11 355.1 -0.5
Wheat Jul 11 802-2 -17-4
Spring Wheat Jul 11 1045-4 -10-6
Kcbt Red Wheat (P) Jul 11 943-0p +0-2
Lean Hogs (P) Jun 11 88.925p +1.125
Feeder Cattle (P) Aug 11 122.725p -0.300
Live Cattle (P) Jun 11 104.100p +0.075
Class III Milk (P) Jun 11 18.48p +0.07
Ethanol Futures (P) Jun 11 2.660p +0.019
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