Tuesday, June 24, 2014
dr_mark_welch

Welch on Grain: Corn Condition Declines but Still Above Average

AgFax.Com - Your Online Ag News Source


Market Situation

Crop Progress. Ahead of this Monday’s Crop Progress report there was some concern that this year’s crop would begin to show damage from excess rainfall in key corn growing areas. Those concerns were largely unsubstantiated in yesterday’s ratings. The crop condition index did decline 2 points to 386 on a 1% increase in the poor, fair, and excellent categories and a 3% decline in the good, but still stands well above the average for this time of year of 371.




In the top 5 producing corn states, the average of corn rated good and excellent is 76% this week, up from 75% last week. Illinois, Indiana, and Nebraska were all up 2% while Iowa was down 4% and Minnesota down 9%.

Corn Use. In numbers related to feed use, last Friday’s Cattle on Feed report showed 10.594 million head on feed as of June 1, 98% of last year’s 10.724 million head and 99% of the five-year average of 10.724 million. The on feed inventory for the corn marketing year is 4% below last year and about 5% below average.

Broiler chick placements for the corn marketing year are running about 1% above year ago levels and 1% below the five-year average.

USDA’s revised estimate of grain consuming animal units shows the cattle portion at a record low percentage of the nation’s meat animal industries, 36%; poultry are at a record high 35%, pork is 29% of all grain consuming animal units, just below its record high of 30%. Total GCAUs for 2014/15 are up 0.5% from 13/14 at 90.147 million, mostly on increases in poultry numbers.

With lower grain prices, energy feed per grain consuming animal unit has rebounded. For the 2014/15 marketing year it is estimated that each GCAU will consume 1.84 metric tons of energy feed up from 1.83 last year. This is back up to the average level of energy feed consumption from 1975 to 2005, prior to the ethanol boom, of 1.82 mt/GCAU.

Outside Markets. From IHS Global here are the week’s key U.S. data releases and events:

The Fed left interest rates unchanged and tapered its bond buying at is latest meeting. Interestingly, although inflation has picked up recently, the Fed does not expect to achieve its 2% target until late next year. This suggests that the Fed is still likely to wait until the second half of next year to raise interest rates, although some individual members are beginning to advocate for moving this date forward. The most likely reason for the slow approach: while consumer price inflation is firming, wage inflation remains limp.

The Consumer Price Index rose 0.4% in May, the largest gain in five quarters, driven by a 0.7% gain in grocery prices and a 0.9% gain in energy prices. Core CPI inflation was 0.3%, a fairly strong reading. This measure of core inflation is now up to 2.0% year on year. While this does not put us in the danger zone of truly elevated inflation, it is no picnic for consumers since wages are barely keeping up.

Builders scaled back on housing starts in May. Total starts slid 6.5%, to 1.001 million. On a positive note, single-family building permits advanced 3.7%. Our analysis emphasizes the gain in permits because the change in housing starts fails the test for statistical significance. However, this broad-based gain in permits is only one data point after a string of disappointments, so it is too soon to tell if we are looking at a spring turnaround for housing construction.

Industrial production added 0.6% in May, on gains in mining and manufacturing output. Revisions left the spring looking quite good for manufacturing as it advanced in three out of the last four months, with a token reversal in April that looks mostly like noise. However, unless GDP growth posts a sharp acceleration in the second half of the year, it could be difficult for the manufacturing sector to sustain this improvement.

First-quarter GDP growth should be revised down to -2.0% from -1.0% in Wednesday’s third estimate. The downward revision will come from a combination of lower consumer spending on healthcare services than previously assumed, and a wider trade deficit. But the second quarter is shaping up to be much stronger. In particular, consumer spending likely advanced 0.2% in May after a lackluster April. Core PCE price inflation is expected at 0.2% for May, pulling year-on-year core inflation up to 1.5%, from 1.4%. Housing-sector data should prove mildly optimistic. We anticipate that existing home sales increased 2.2% in May, to 4.75 million units, and that new home sales advanced 0.9%, to 437,000 units (annual rates). April’s housing inventory expansion likely provided a boost to sales. Home price appreciation, meanwhile, is moderating, and year-on-year gains in the S&P/Case-Shiller index likely fell to 11.8% in April, from 12.4% March. Finally, rising gasoline and food prices likely weighed on consumer optimism this month, with the final Reuters/University of Michigan’s sentiment index slipping to 81.1, from the preliminary 81.2.

Marketing Strategies

2014 Corn Marketing Plan. I am 40% priced on 2014 feed grain production. My next sales objective is this month around the time of the Acreage and Grain Stocks reports. The December contract tried to move higher late last week on weather concerns but Monday’s key reversal quickly undid all that we had briefly gained. However, at least to this point, support around $4.37 has held.

Upcoming Reports/Events.

June 27 – Quarterly Hogs and Pigs report
June 30 – Crop Progress, Acreage, Grain Stocks
July 7 – Crop Progress
July 11 – WASDE


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

    Cleveland on Cotton: Harvest Weather Dictates Market’s Next Big Move7-30

    Grain TV: Strong Ethanol Production Helps Boost Corn7-30

    DTN Livestock Close: Futures Swing Hard in Opposite Directions7-30

    DTN Cotton Close: Falls to Another New Contract Low7-30

    First U.S. Soybean Crop for the Year Harvested in South Texas7-30

    Doane Cotton Close: Triple-Digit Losses in Most Contracts7-30

    DTN Fertilizer Trends: Slow Season Expected for Fertilizer Booking7-30

    DTN Grain Close: Corn, Wheat Hold on to Gains7-30

    Cotton In Southeast – Stink Bugs Build But Plant Bugs, Aphids Linger – AgFax7-30

    Peanut Stocks and Processing: Utilization Up 2% from Last Year7-30

    Virginia Ag Expo, Lottsburg, Aug. 77-30

    AgFax Cotton Review: Possible Rise in Chinese Imports; Pigweed Problems in Texas7-30

    DTN Livestock Midday: Cattle Futures Sharply Higher7-30

    DTN Grain Midday: Corn, Soybean Trade Mixed7-30

    Endangered Species Act Reform Passes House — DTN7-30

    USDA Preps for Possible Invasion by Old World Bollworm — DTN7-30

    DTN Cotton Open: Ticks Quietly Just Above Unchanged7-30

    DTN Livestock Open: Mixed Start for Meat Futures7-30

    DTN Grain Open: Wheat Starts Fractionally Higher7-30

    Keith Good: C.O.O.L. Rules for Packaged Meat Upheld by Appeals Court7-30

    Keeping Farm Management in Line with Increasing Regulations – DTN7-29

    Mississippi: MSU Wild Hog Research Needs Foresters, Farmers7-29

    USDA: Weekly National Peanut Prices7-29

    AgFax Grain Review: Chinese Trade Issues Continue; Navy to Purchase 37M Gallons of Biofuels7-29

    AFB Grain-Soybean Close: Wheat Unable to Follow Corn, Soybeans Higher7-28

    AFB Cotton Close: Moves Higher in Narrow Range7-28

    AFB Rice Close: Futures Down Slightly7-28

    Crop Progress: Corn, Soybean Conditions Decline, Still at Historical Highs – DTN7-28

    DDGs: China Issues New Import Rules, U.S. Unlikely to Comply – DTN7-28

    Cattle: Minimizing the Risk of Scours — DTN7-28

    Good on Grain: Storing the 2014 Corn Crop7-28

    DTN Fertilizer Outlook: Domestic Ammonia Prices Down Slightly7-28

    Flint on Crops: Challenges for Farmers Keep Coming, Keep Changing7-28

    USDA Commentary: Weekly Cotton Markets, Weather by Region7-25

    Rose on Cotton: No Pleasure in this Market Made for Bears7-25

    Rice Market: U.S. Futures Decline as Global Prices Rise7-25

    Rice Crop: Harvest Begins Slowly in Louisiana and Texas7-25

    Rice Commentary – Rice Farmers Need to Consider a New Business Plan7-25

    Leave Your Guns at the House, Boys.7-25

    Rail Car Delays Causing Dread Among Elevator Operators – DTN7-25

    Catfish Production: Water Surface Acres at 63,700 Acres7-25

    USDA: Peanut Price Highlights7-25

    Arkansas: New iPhone App Simplifies Farmers’ Finances7-25

    Taking the Risk Out of Buying Used Equipment — DTN7-25

    North Carolina: Rediscovering Grain Sorghum — DTN7-25

    Peanuts: Worms Still Building In SE; Rains Boost West’s Crop – AgFax7-25

    Shurley on Cotton: Prices Try to Stabilize, Still Show Weakness7-25

    AgFax Wildlife Review: Wild Hogs Damaging Levees in Louisiana7-25

    Doane Cotton Close: Prices Break Out of Range Lower7-24

    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