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

    DTN Livestock Close: Cattle Futures Implode for 2nd Consecutive Session8-20

    Doane Cotton Close: Biggest Day-Gains Since June8-20

    Farmers Work to Wrap Up Summer as Fall Peeks Over Horizon – DTN8-20

    Louisiana: Destructive Emerald Ash Borer Spreads with Firewood8-20

    DTN Cotton Close: Market Surges Above Prior 3 Weekly Highs8-20

    The Glory Days Are Gone: Not Your Daddy’s Farm Program – DTN8-20

    Crop Insurance: Commodity Payment Caps and AGI Restrictions – DTN8-20

    Do Big Corn Crops Always Get Bigger? Not Necessarily.8-20

    AgFax Cotton Review: World Consumption to Rise; Best Texas Yields in 3 Years8-20

    Louisiana: Fertilizer Research Benefits from New Equipment8-20

    AgFax Grain Review: Longest Bear Streak in 8 Years; Watch Silage Moisture Levels8-20

    DTN Grain Close: Positive Weather Leads to Negative Prices8-20

    DTN Livestock Midday: Widespread Losses Continue Across Complex8-20

    DTN Grain Midday: Wheat Trade Slides Lower8-20

    Farming on the Mother Road: Okies Still Battling Droughts — DTN8-20

    DTN Cotton Open: Little Changed within Tiny Span8-20

    DTN Livestock Open: Cattle Paper Set for Defensive Start8-20

    DTN Grain Open: Lower Start for Corn, Soybeans8-20

    Keith Good: Indiana Soybean, Corn Yields Likely to Top USDA Forecast8-20

    Cotton in Southwest: Resistant Pigweed Thrives: Aphids Won’t Quit – AgFax8-19

    Grain TV: Little Change as Pro Farmer Tour Continues8-19

    USDA: Weekly National Peanut Prices8-19

    Farmland Prices Expected to Stabilize, Possibly Decline8-19

    Crop Insurance: Remember to Verify Acreage History at Local FSA Office8-19

    Local Crop Reports: Still Some Issues Out There — DTN8-19

    Oil Crops Outlook: U.S. Soybean Yields Rise With Favorable Weather8-19

    Cotton Outlook: U.S. Production Increased 1M Bales8-19

    GMO Critics Invited to Testify at Public Meeting on Biotech — DTN8-19

    Rice Outlook: U.S. 2014-15 Production Projected at 228.8M Cwt8-19

    Welch on Grain: Yield Prospects Continue to Look Strong8-18

    Welch on Wheat: Prices Continue to Struggle8-18

    Soybeans: Brazil Mulls Ban on Second Crop – DTN8-18

    Good on Grain: Corn and Soybean Acreage8-18

    Study: Feed Identified as Risk Factor in Spread of PEDv — DTN8-18

    Flint on Crops: Nutrient Deficiencies at Root of Many Problems8-18

    Pork Prices Rising in South Korea — DTN8-18

    Rice Harvest Stalls In South Louisiana; Draining Begins In Midsouth – AgFax8-15

    EPA Cancels Methomyl Insecticide Use on Barley, Oats and Rye8-15

    Rose on Cotton: USDA Report Fed the Bears8-15

    Florida: Suppress Palmer Pigweed with a Ryegrass Cover Crop8-15

    Peanuts: Insects, Mites Persist In Lower Southeast – AgFax8-15

    U.S. Rice Crop: Harvest Underway in Texas, Louisiana; Cooler Temps Elsewhere8-15

    Rice Market News: USDA Number Too High on Ending Rice Stocks8-15

    Southern Grain: Stink Bugs Building In Soy; Sugarcane Aphid Spreads – AgFax8-15

    AFB Grain-Soybean Close: Corn and Wheat Up, Beans Down8-15

    AFB Cotton Close: Futures Slightly Lower8-15

    AFB Rice Close: Futures Finish Mixed8-15

    Mississippi Sorghum: Sugarcane Aphid Problem May Kill 2015 Crop8-15

    Farmland Values and Returns Tools for 20148-15

    Soybeans: Could be a Year for Record Yields — DTN8-15

    Prevented Planting Acreage Drops Significantly from 2013 — DTN8-15

    Louisiana: Wild Hog Damage Survey to be Conducted8-15

    Mississippi Outdoors: Early Forecast for Duck Migration Looks Good8-15

    DTN Distillers Grain: Prices Do an About-Face8-15

    Hedge or Speculation? IRS Draws the Line — DTN8-15

    Mississippi Sorghum: EPA Amendment Allows 3rd Transform Application8-14

    Grain Bag Systems Speed Up Efficiency During Harvest – DTN8-14

    Cleveland on Cotton: Don’t Count Chinese Out – They Need High Quality Fiber8-14

    Argentine Farmers Play It Safe, Plant Soybeans — DTN8-14

    Farm Family: What is Your Legacy Beyond the Business? – DTN8-14

    U.S. Grain Transportation: Weekly Inspections Down Slightly8-14

    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