Friday, May 16, 2014
dr_mark_welch

Welch on Wheat: Conditions Continue Decline as Key Areas Miss Rains

AgFax.Com - Your Online Ag News Source


Market Situation

Crop Progress. Monday’s report showed the continued decline in the condition of the U.S. wheat crop. The percent rated very poor increased 3%, poor was up 1%, fair -3%, good -1%, and excellent unchanged; 42% of the U.S. wheat crop is in very poor or poor condition. The national crop condition index score is 273, down from 281 last week. The average for this time of year is 334.

The Texas wheat crop condition index fell 10 points this week, down to 209 from 219. Compared to last week the percent rated as very poor is up 4, poor is unchanged, fair is down 2, and good is down 2. Excellent was unchanged at 1%. Wheat rated as very poor and poor account for 68% of the Texas crop, up from 64% last week.

Wheat rated as very poor and poor in Kansas increased on the week from 47% to 56%; Oklahoma wheat in very poor and poor condition is 75% this week, up from 73% last week. The crop index of Southern Plains wheat is down another 14 points to 220.




Weather. Rainfall continues to miss the driest portions of the Southern High Plains.

The 7-day forecast calls for amounts in excess of ½ inch for most of Kansas, in time to still do some good with only half the crop headed (46% as of last Sunday).

Much lighter amounts are predicted for Oklahoma and Texas.

Longer term, models from the Climate Prediction Center continue to forecast an El Nino event later this fall, exceeding a 65% probability.

El Nino winters are normally associated with above average precipitation and below average temperatures in the Southern Plains. Since 1973, Texas average wheat yields are 6.6% above trendline following El Nino winters.

Commitment of Traders. Hedge funds reduced bullish positions by another 14,000 contracts this week according to this afternoon’s Commitment of Traders report from the CFTC.

For positions as of Tuesday May 13th, index funds added a modest 541 net longs.

The price index was down about 3 points this week with July KC -20; July Chicago wheat -30, and July corn -15. July soybeans were up week to week 24 cents.

The CFTC snapshot of the corn market on May 13th showed hedge funds decreasing net long positions by 5,933 contracts.

The July to September spread is still inverted with July at a premium of 6¼ to Sep.

Hedge funds reduced net long holdings in Kansas City Wheat last week by 4,476 contracts

Carry in the Kansas City Wheat market from July to September was 4¼ cents for a neutral 35% of the cost of commercial storage.

The Texas corn and wheat basis is still strong, running above the average of the last 10 years.

The corn basis in the concentrated cattle feeding area of the central Texas panhandle is averaging +44 cents per bushel compared to an average of +19. Wheat north of the Canadian is -13 cents compared to an average of -54 cents.

Marketing Strategies

2014 Wheat Marketing Plan. I priced the final 20% of insured wheat production for 2014 on Wednesday when the closing price of the July contract fell below the 4-day and 9-day moving averages. I priced the first 20% of 2015 production the next day on the same technical signals in that contract.

On today’s close, the impact of current hedging decisions for a hypothetical farm [1,000 acres of wheat, 23 bu. APH,-$0.40 basis, 65% revenue protection crop insurance, production expectations of 10 bushels per acre] is revenue of $111,020. This compares to revenue of $110,795 from crop insurance alone or $72,775 with no risk management strategy in place.

Upcoming Reports/Events.

May 19 – Crop Progress
May 27 – Crop Progress
June 2 – Crop Progress
June 9 – Crop Progress
June 10 – Short-term Energy Outlook
June 11 – WASDE
June 16 – Crop Progress
June 20 – Cattle on Feed
June 23 – Crop Progress
June 30 – Crop Progress, Acreage, Grain Stocks


Tags: , , , , , , ,


Leave a Reply

Name and Email Address are required fields. Your email will not be published or shared with third parties.

Sunbelt Ag News

    DTN Cotton Open: Trades on Modest Losses10-2

    DTN Livestock Open: Feeder Contracts to Surge Further10-2

    DTN Grain Open: Wheat Futures Begin Higher10-2

    Keith Good: Fight Against PED Virus Accelerates as Pork Prices Climb10-2

    Grain TV: Positive Day but No Major Gains10-1

    DTN Livestock Close: Cattle Futures See Bullish Explosion10-1

    U.S. Dollar Strength Weighing Down Commodity Markets – DTN10-1

    DTN Cotton Close: Settles to Marginal Losses10-1

    DTN Grain Close: Slight Price Rebound10-1

    DTN Livestock Midday: Strong Gains Develop Across Complex10-1

    U.S. Ag Shortliners Take Their Technology to World — DTN10-1

    DTN Grain Midday: Futures Lower in Quiet Trade10-1

    DTN Fertilizer Trends: State Averages for Anhydrous Vary Widely10-1

    Good on Grain: Stocks Estimates Provide No Support for Prices10-1

    Arkansas: Winter Wheat Growers Set Another Yield Record10-1

    Georgia Peanut Commission Launches Peanut Allergy Website10-1

    Shifts in Corn Consumption Revealed in USDA Report — DTN10-1

    USDA Grain Stocks Report Bearish for Corn, Wheat — DTN10-1

    Farm Bill Decision Deadlines and the Farm Bill Toolbox9-30

    Doane Cotton Close: Analyst Predicts 40 Cent Futures9-30

    AFB Grain-Soybean Close: Prices Lower Despite Bullish Soy Stocks9-30

    AFB Cotton Close: Futures in the Red9-30

    AFB Rice Close: Futures Fractionally Mixed9-30

    AgFax Cotton Review: Global Supply Hurts Prices; Cotton Transition Assistance Program Deadline Looms9-30

    USDA: Weekly National Peanut Prices9-30

    USDA Grain Stocks: Corn Up 50%, Wheat 2; Soybeans Drop 359-30

    USDA Wheat: Production Drops 5 Percent from 20139-30

    Grain Storage, Transportation Worries Mount — DTN9-29

    Soybeans: Protein, Oil Values Rate More Market Attention — DTN9-29

    Soybean Harvest Rises by 7 Points, Corn 5 — DTN9-29

    Growing Demand for Pork Likely to be Met — and Quickly9-29

    Peanut Stocks and Processing: Utilization Up 4%, Stocks at 1.4B Pounds9-29

    Peanuts: New Revenue Policy Implemented by USDA9-29

    Flint on Crops: What is a Good Variety Worth?9-29

    Southern Grain Crops In 2014 – Top 10 Trends, Issues, Setbacks – AgFax9-28

    Farm to Table: Something Old is New Again. – AgFax9-26

    Rice: Mexico To Restore Import Tariffs on Asian Rice9-26

    Rice Crop: Delta Area Harvests Picking Up Steam9-26

    Rice Market: Strong Friday Push Makes for a Positive Week9-26

    Rose on Cotton: Bearish News – We got plenty.9-26

    Cleveland on Cotton: Chinese Moves Send Market into Free Fall9-26

    Sizing Up Sudden Death Syndrome: Management Decisions to Fight Back – DTN9-26

    Nebraska: New Study Addresses Climate Change Challenges – DTN9-26

    GMO Wheat Appears in Montana as USDA Wraps Up Oregon Investigation – DTN9-26

    Welch on Wheat: Harvest Behind Normal, Conditions Decline9-26

    Louisiana: Ag Officials Ask for New Rules for Drones9-26

    Welch on Grain: Corn Condition Improves Slightly9-26

    USDA: Peanut Price Highlights9-26

    Shurley on Cotton: Carefully Consider Selling Options9-26

    AgFax Wildlife Review: S.C. National Park Confronts Wild Hog Problem9-26

    Crop Insurance Details Clearing Up — DTN9-26

    Sunbelt Ag Events

     

    About Us

    AgFax.Com covers agricultural trends and production topics, with an emphasis on news about cotton, rice, peanuts, corn, soybeans, wheat and tree crops, including almonds, pecans, walnuts and pistachios.

      

    This site also serves as the on-line presence of electronic crop and pest reports published by AgFax Media LLC (formerly Looking South Communications).

        

    Click here to subscribe to our free reports.

      

    We provide early warnings and confirmations about pests, diseases and other factors that influence yield. Our goal is to quickly provide farmers and crop advisors with information needed to make better and more profitable decisions.

         

    Our free weekly crop and pest advisories include:

    • AgFax Midsouth Cotton, covering cotton production and news in Alabama, Arkansas, Louisiana, Mississippi, Tennessee and Missouri.

    • AgFax Southeast Cotton, covering cotton production and news in Alabama, Florida, Georgia, North Carolina, South Carolina and Virginia.

    • AgFax Southwest Cotton (new for 2013!), covering cotton production and news in Texas, Oklahoma, Kansas and New Mexico.

    • AgFax West (formerly MiteFax: SJV Cotton), covering California cotton, alfalfa, tomatoes and other non-permanent crops in California's Central Valley.

    • AgFax Rice covering rice production and news in Arkansas, Louisiana, Mississippi, Missouri and Texas.

    • AgFax Peanuts, covering peanut production in Alabama, Arkansas, Florida, Georgia, Louisiana, Mississippi, North Carolina, South Carolina, Texas and Virginia.

    • AgFax Southern Grain: covering soybeans, corn, milo and small grains in Southern states.

    • AgFax Almonds, covering almonds, pistachios, walnuts and other tree crops in California's Central Valley.

    • AgCom 101, providing guidance to ag professionals involved in social media.

    Our newsletters are sponsored by the following companies: FMC Corporation Chemtura Dow AgroSciences.

          

    Mission statement:

    Make it as easy as possible for our community of readers to find and/or receive needed information.

              

    Contact Information:

    AgFax Media. LLC

    142 Westlake Drive Brandon, MS 39047

    601-992-9488 Office 601-992-3503 Fax

    Owen Taylor Debra L. Ferguson Laurie Courtney

          

    Circulation Questions?

    Contact Laurie Courtney