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

    AgFax Grain Review: China Approves Syngenta Corn; Turkey Bans U.S. DDG Imports12-19

    Rose on Cotton: Consider Selling Remaining Spot Cotton12-19

    Livestock: USDA Drops Checkoff Plan Following Appropriations Bill12-19

    Georgia Farmer Sets New World-Record Corn Yield – DTN12-19

    Grain TV: Basis Levels Lower at Many Crushing Plants12-19

    DTN Livestock Close: Cattle Futures Rebound With Triple-Digit Gains12-19

    Doane Cotton Close: Another Choppy Week Ends Slightly Ahead12-19

    Arkansas: State Plant Board Approves Enlist Duo, Dicamba Weed Control Systems12-19

    Mississippi Crop Values to Top $7B for 3rd Straight Year12-19

    AFB Grain-Soybean Close: Wheat, Soybeans Drop, Corn Mixed12-19

    AFB Cotton Close: Mixed as Futures Continue to Consolidate12-19

    AFB Rice Close: Strong Gains to End the Week12-19

    Texas Pecans: Moderate Deliveries, Good Demand12-19

    Oklahoma Pecans: Moderate Early Deliveries Taper Off12-19

    Cleveland on Cotton: India Stirs the Bears; China Releases Reliable Stock Estimates12-19

    Western Region Pecans: Buying Interest Good, Moderate Deliveries12-19

    Georgia Pecans: Increased Deliveries, Smaller Lots12-19

    Alfalfa: Dupont Pioneer Sells Alfalfa Seed Biz To S&W12-19

    Texas Ag Benefits from Normalized U.S.-Cuba Relations, Says Expert12-19

    Brazil Livestock: Small Scale Ranchers Account for Most Deforestation – DTN12-19

    DTN Cotton Close: Narrowly Mixed on Light Volume12-19

    USDA: Peanut Price Highlights12-19

    AgFax Peanut Review: Spray Fungicides at Night; New Peanut Butter and Chocolate Ice Cream12-19

    DTN Grain Close: Wheat Pulls Back As Ruble, Oil Rally12-19

    Mississippi Soybeans: Record Yield Valued at $1.17B12-19

    DTN Livestock Midday: Feeder Cattle Post Strong Gains12-19

    DTN Grain Midday: All 3 Markets Trading Lower12-19

    Weekly Cotton Market Review12-19

    Mississippi Outdoors: Feeding Wildlife in Winter Can Cause Problems12-19

    DTN Cotton Open: Ticks Quietly Just Below Unchanged12-19

    AgFax Wildlife Review: Oklahoma Man Faces Felonies Over Wild Hogs12-19

    DTN Livestock Open: Futures to Begin Solidly Higher12-19

    DTN Grain Open: Wheat Futures Plummet12-19

    Keith Good: New Cuba Policy Could Open Huge Market for U.S. Wheat12-19

    DTN Livestock Close: Cattle Futures Pull Out of Price Collapse12-18

    Nitrogen Fertilizer: Oversupply, Geopolitical Risk Overshadow Strong Global Demand – DTN12-18

    China Holds Grain Import Quotas Steady, Revises Application Process – DTN12-18

    Doane Cotton Close: Choppy Sideways Action Continues12-18

    Chumrau on Wheat: USDA Raises World Estimates, No Comment on Russian Rumors12-18

    Georgia: 2015 Ag Forecast Meetings in Mid-January12-18

    John Deere Sells Crop Insurance Arm To Farmers Mutual Hail12-18

    Japan Elections Won’t Soften Trade Issues — DTN12-18

    U.S. Grain Transportation: Rail Shipments Make Big Jump12-18

    DuPont Pioneer Rolls Out New Soybean And Corn Selections For 201512-18

    Updated ARC-CO and PLC Payment Indicator for 2014 Crop Year12-18

    Livestock: Sharp Cattle Declines as Inscrutable as the Grinch – DTN12-18

    U.S. Drought Outlook: Improvement Expected Across California12-18

    Ag Trade Should Benefit from Thaw in U.S.-Cuba Relations12-18

    U.S. Energy: Heating Oil Expenditures Expected to Drop This Winter12-18

    Gasoline Prices: Decline in All Regions12-18

    Propane Stocks: Decrease by 0.8M Barrels12-18

    Diesel Prices: Average Drops 12 Cents12-18

    Virginia Govt. Joins USDA, EPA in Fighting Nutrient Runoff – DTN12-17

    Louisiana Pecans: Deliveries Very Light, Few Improved Varieties12-17

    Tennessee: TAPA Winter Agronomic Workshop and Cotton Focus, Jackson, Feb. 11-1212-17

    Crop Insurance: Supplemental Coverage Option Unavailable When Choosing ARC Programs12-17

    Crop Insurance: Choosing Between Base Acre Allocation Alternatives12-17

    Senate Passes Tax Extenders Bill with Key Provisions for Ag — DTN12-17

    Brazil: Amazon Deforestation Issues Concern Ag Communities – DTN12-16

    DTN Fertilizer Outlook: Global Phosphorous Demand to Increase12-16

    USDA: Weekly National Peanut Prices12-16

    Buying Local Not Without Risks, Study Finds12-16

    U.S. Ag in Strong Position with High Avian Flu Risks Elsewhere in ’1512-16

    Grain Markets: 50-Day Moving Average Never Out of Style — DTN12-16

    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