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Market Report and Easter Fun


Markets

3/30/15 10:56am
Dow +258.77
S&P +20.69
Nasdaq +37.67

Kraft Foods and Heinz Merge, Two of the biggest names in packaged foods—Kraft and Heinz—are merging in a deal orchestrated by Warren Buffett and Brazilian private-equity firm 3G Capital Partners L.P., creating one of the world’s largest food and beverage companies.  Heinz shareholders will hold a 51% stake in the combined company, while Kraft shareholders will hold a 49% ownership stake. Kraft shareholders also will receive a special dividend of $16.50 a share, representing 27% of Kraft’s closing price on Tuesday.  More here: http://www.wsj.com/articles/kraft-foods-h-j-heinz-to-merge-1427278332?KEYWORDS=kraft+foods

Grain Markets

3/30/15 10:56am
Corn +2 @ 3.93
Beans +5 ½ @ 9.72 ¾ 

I am sure you have heard the many challenges of getting grain out of Brazil.  An interesting video surfaced from Brazil, of a bus getting consumed by a sink hole, as you can see the roads/infrastructure is simply not there – see the video here: http://www.nbcnews.com/nightly-news/video/sinkhole-swallows-tour-bus-in-brazil-418282563617

Seeing mostly consolidation type trading heading in to the USDA report on Tuesday at 11am.  The Planting intentions report can be a market mover, in which direction remains to be seen.  It may be wise to place a “stretch” offer (higher than normal offer) ahead of the report, in hopes to capitalize on any post report market reactions.

Corn

Traders await tomorrows USDA numbers, will USDA raise or lower their corn planted acreage estimate of 89 million?  Most traders are unsure, and this lack of commitment leaves the market range bound.  Versus the alternative of having the anticipated result “built into the market.”  It is likely any change in USDA’s numbers will cause a shift in the market.

Beans

Similar to corn, awaiting USDA data, USDA currently at 83.7 million.  Seems traders have more of an opinion on beans, thinking USDA may add 2 or 3 million more acres.  This is likely bearish, but we will have to wait and see.  If you are concerned about a drop in bean prices, consider a minimum price/floor strategy.

Wheat

I don’t normally cover wheat, however a lot of talk of wheat prices reaching new highs, possibly even double some say.  Bad crops in Russia, and Ukraine, together with a rising U.S. dollar, could cut inventories further, pushing prices sharply higher.  Wheat currently up .19

For Fun

With Easter just around the corner did you know 70% of Easter candy purchased is chocolate? Though I love chocolate, I think that number is skewed a bit, because we are buying huge chocolate bunnies, and in many cases the chocolate tastes terrible and a portion gets tossed….it’s all about presentation for the Easter basket right?!?  You might also know that 76% of people eat the ears off of the bunny first.

Personally I am about the Jelly Beans, and though my wife thinks I am weird….I like the spice jelly beans.  If you like Jelly Beans as well, here are some interesting fun facts:

  1. The origin of jelly beans is kind of a mystery, but they’re thought to be a descendant of Turkish Delight or Jordan Almonds.
  2. The modern day jelly bean was promoted to Union Soldiers during the Civil War.
  3. To create the hard outer shell of a jelly bean and keep the inside gooey, a process is used called “panning.”
  4. In the early 20thcentury, “jelly bean” was a slang term for a man who put forth great effort to dress stylishly.
  5. Jelly beans became a regular penny candy in the 1900s and were the first confection to be sold by weight rather than price.
  6. Each color of jelly bean used to be sold separately.
  7. In the 1930s, Easter became the most popular time for jelly bean consumption.
  8. There are 16 billion jelly beans manufactured solely for Easter. (That’s enough to circle the Earth 3 times.)
  9. Jelly beans were President Reagan’s favorite candy and for his first inauguration, 7,000 pounds of jelly beans were ordered and distributed. (Jelly Belly created a new flavor, Blueberry, specifically for the event.)
  10. It can take anywhere from 7 to 21 days to make a jelly bean.
  11. In 35 jelly beans, there are about 130 calories and 37 grams of sugar.
  12. Most jelly bean assortments include 8 different flavors.

Greg Mockenhaupt

ProEdge Risk Management Consultant

P: (402) 685-5613 | C: (402) 380-9855 | Greg.Mockenhaupt@cvacoop.com

1007 County Road O

Oakland, NE 68045

www.cvacoop.com

—————————-
CONFIDENTIALITY: 

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USDA Abandons Farm Payment Limit Reform


Lyons, Nebraska – Today USDA issued their proposed rule to define what it means to be “actively engaged in farming,” and therefore eligible to receive federal farm payments.
“The purpose of revising the actively engaged definition was to make farm payment limits more effective,” said Traci Bruckner, Senior Associate at the Center for Rural Affairs. “USDA is, however, clearly more interested in defending the interests of mega-farms by preserving loose definitions that will continue to allow the nation’s largest farms to avoid meaningful payment limits.”
“This is not reform,” added Bruckner. “In 2007, while campaigning in Iowa for his first election, President Obama promised to close these loopholes, and so did Vice President Biden. But when given yet another opportunity to fulfill that promise, the White House and Secretary Vilsack took a pass, again.”
“The lack of effective payment limitations has resulted in federal farm programs financing farm consolidation and the elimination of many mid-size family farms….Barack Obama and Joe Biden will close the loopholes that allow mega farms to get around the limits by subdividing their operations into multiple paper corporations.  They will take immediate action to close the loophole by proposing regulations to limit payments to active farmers who work the land….Every President since Ronald Reagan has had the authority to close this loophole without additional action by Congress, but has failed to act.” President Barack Obama, writing as a candidate for President in his rural platform – Obama-Biden: Real Leadership For Rural America
According to Bruckner, Secretary Vilsack has said since the passage of the 2014 Farm Bill that the bill ties his hands and he can not apply any new rule to farms structured solely of family members.
“We have disagreed with that premise from day one, and this rule does nothing more than say the largest and wealthiest farms structured solely of family members are not subject to this new rule or any payment limitation,” argued Bruckner.
Most of the few farms this rule would impact, those structured as non-family member operations, will surely work with an attorney to reorganize their operations to be structured solely of family members to evade any payment limitations, Bruckner concluded.

Grain Market Report


Markets 2/9/15 @ 10:13am:

Corn +5 ¼ @ 3.91

Beans +4 ¾ 9.78 ¼

 

Political:

The steelworkers strike appears to have worsened over the weekend as well with another 1,440 workers walking out of BP refineries in Ohio and Indiana. We now have about 13% of US refining capacity being impacted by the labor strike in the energy sector. Rumors are Shell has now officially walked away from the talks, which could cause the strike to spread to even more plants.

 

Market Info:

A mixed trade so far this morning as weather remains mostly favorable, South America seeing rains over the weekend with more forecasted this week.

–          Exports: USDA announces the sale of 120,000 MT of beans to China for 14/15 marketing year.

–          The USDA Crop Report is tomorrow at 11am.

–          Goldman roll continues this week, if you plan to roll any HTA’s it’s a good time to place the order.

 

Greg Mockenhaupt

ProEdge Risk Management Consultant

P: (402) 685-5613 | C: (402) 380-9855 | Greg.Mockenhaupt@cvacoop.com

1007 County Road O

Oakland, NE 68045

www.cvacoop.com

Markets Close


Markets upon close 1/12/15

Mar Corn +1 ¾ @ 4.02

Mar Beans -36 ¼ @ 10.16

 

CORN

 

USDA estimated 2014’s corn production at 14.216 billion bushels, down 191

million bushels from its November estimate. Farmers harvested 83.1 million

acres with a record national average yield of 171 bushels per acre. That’s 2.4

bpa lower than USDA’s November estimate.

 

Corn stocks as of December 1, at 11.2 billion bushels, are 7% higher than

during the same period the year prior, USDA said in its quarterly Grain Stocks

report. Of total stocks, 7.09 bb are stored on farm, up 11% from last year. The

remainder, 4.12 bb, is stored in off-farm locations. Disappearance from

September to November 2014 indicated demand of 4.25 bb, compared to 4.29 bb the

prior year.

 

USDA’s WASDE report put corn ending stocks for the 2014-15 marketing year at

1.877 bb, down 121 mb from USDA’s December estimate of 1.998 bb. After USDA

incorporated the revised production estimate, it trimmed 100 mb from feed and

residual demand and added 25 mb of demand for ethanol and food, seed, and

industrial use. USDA said the extra corn use for ethanol was to offset a

decline in sorghum use for ethanol. The ending stocks-to-use ratio came in at

13.8% compared to 14.6% in December.

 

Globally, USDA pegged ending stocks 189.15 million metric tons, down a

little more than 3 mmt from last month on the decline in U.S. production. USDA

left Brazil, Argentina and China’s corn production forecasts unchanged. USDA

anticipates that China will import 2 mmt of corn, down from 3.28 mmt last year.

 

The global stocks-to-use ration came in at 19.5% compared to 19.8% last

month.

 

SOYBEANS

 

Farmers produced 3.969 billion bushels of soybeans, USDA said in its Annual

Crop Production report. It’s nearly identical with the average pre-report

estimate but slightly higher than the November forecast. USDA said farmers

harvested 83.1 million acres, a record, with a national average yield of 47.8

bpa, which is 0.3 bpa higher than the previous estimate and also a record. USDA

may update the soybean production figure in its September 2015 quarterly stocks

report.

 

There are 2.52 bb in storage, up 17% from a year earlier, according to the

Grain Stocks report. Farmers are holding 1.22 bb on farm, up 28% from the

previous year, while 1.31 bb are stored in off-farm locations. Disappearance

for September through November totaled 1.54 bb, up 14% from the same period a

year earlier.

 

The WASDE report left ending stocks unchanged at 410 mb. USDA incorporated

the slightly larger production estimate, which was offset by a 10 mb increase

in exports and 1 mb increase in residual use. The stocks-to-use ratio was

unchanged at 11.2%.

 

Globally, USDA increased its forecast for soybean ending stocks by 0.91 mmt

to 90.8 mmt. It estimates Brazil’s production at 95.5 mmt, up 1.5 mmt from

December, and Argentina’s production at 55 mmt, unchanged from December. Global

ending stocks-to-use grew to 31.7% from last month’s 31.4%.

 

 

 

 

January 12th Pre-Report Table
Quarterly Stocks
Dec 1 Average Estimate Estimate Range Sep 1 Stocks Dec 1 ’13
Stocks Stocks
Corn 11.203 11.123 10.820-11.325 1.236 10.453
Soybeans 2.524 2.590 2.400-2.742 0.092 2.154
Wheat 1.525 1.499 1.400-1.585 1.914 1.475
2014/15 US Production
USDA Average Estimate Estimate Range USDA    Nov ’14
January
Corn 14.216 14.349 14.171-14.554 14.407
    Yield 171.0 173.3 171.3-174.3 173.4
Soybeans 3.969 3.956 3.844-4.020 3.958
    Yield 47.8 47.6 46.8-48.2 47.5
2014/15 US Ending Stocks
USDA Average Estimate Estimate Range USDA     Dec ’14
January
Corn 1.877 1.927 1.710-2.081 1.998
Soybeans 0.410 0.393 0.355-0.452 0.410
Wheat 0.687 0.666 0.636-0.699 0.654
2014/15 World Ending Stocks
USDA Average Estimate Estimate Range USDA     Dec ’14
January
Corn 189.150 191.19 186.50-193.00 192.20
Soybeans 90.780 89.35 87.40-90.55 89.87
Wheat 196.000 194.33 190.90-196.00 194.90
Stocks, Production, Carryout numbers in bil bu.   Acres in millions.   Source: Rueters
US numbers in bil bu.  World numbers in million metric tons.   Source: Rueters
Compiled by Thomas Meierotto, RJO’Brien-Iowa Office, tmeierotto@rjobrien.com

 

Greg Mockenhaupt

ProEdge Risk Management Consultant

P: (402) 685-5613 | C: (402) 380-9855 | Greg.Mockenhaupt@cvacoop.com

 

 

 

1007 County Road O

Oakland, NE 68045

www.cvacoop.com

Improvements to USDA Beginning Farmer Loans


USDA recently announced several changes to Farm Service Agency (FSA) loan programs, changes designed to help more beginning farmers and ranchers. The new “interim final rule” will increase the Microloan limit from $35,000 to $50,000. This program provides a simplified application process and a seven year payback. Microloans can be used for approved operating expenses, such as seed, fertilizer, utilities, land rents, marketing, distribution, living expenses, livestock, equipment, hoop houses, tools, irrigation and delivery vehicles.

 

USDA is also changing the “experience” requirement for FSA Direct Farm Ownership loans. Previously, applicants had to prove they participated in the operations of a farm for at least three years. Beginning farmers across the country identified this restriction as a real barrier. It is not reflective of current realities in which new farmers enter agriculture.

 

The change will allow beginning farmers and ranchers to substitute one year of that three-year requirement with a formal farming apprenticeship, operation or management of a non-farm business, leadership or management experience while serving in any branch of the military, advanced education in an agricultural field, and significant experience in a farm-related agricultural career.
USDA also proposes changing the types of farming entities eligible to apply, potentially opening the door to non-majority investors who are not actively farming or managing the operation. We’ll watch these changes closely. The deadline to submit public comments on these changes to the USDA is December 8, 2014. Contact Traci Bruckner, tracib@cfra.org, for more information.

Special Grain Report


Special Report
This morning the USDA issued their September Supply and Demand estimates for principle crops including corn, soybeans, and wheat. The following tables show a breakdown of the numbers:

 

Corn:

The USDA left the old crop carryout unchanged leaving all adjustments in the new crop category. Production was up over 300 mbu from the August numbers on a yield increase of 4.3 bpa. These numbers are slightly higher than what many thought the USDA would throw at us for the September report. Fortunately, new crop demand categories increased in the Feed (+75), Ethanol (+50), and Export (+25) categories, resulting in a 14/15 carryout increase of nearly 200 mbu.

Market Reaction: Negative. Regardless of what the USDA was going to say today, many are convinced that the highest production estimates are yet to come. Harvest numbers will confirm the USDA’s thoughts. We would expect our negative trend to continue.

 

Soybeans:

Old crop soybean carryout levels fell by 10 mbu with higher production expected in new crop. Yield numbers increased by 1.2 bpa resulting in production increases of nearly 100 mbu. Demand categories of Crush (+15) and Exports (+25) increased to partially offset the supply increases. The net result was an increase to the 14/15 carryout by 45 mbu.

Market Reaction: Negative. Similar to corn, the market is anticipating harvest results in the coming month that will confirm the size of the crop. Absent of any freezing weather in the next few weeks, the size of the bean crop looks to grow.

 

World Stocks:

14/15 World carryout continues to climb, which continues to drive the market into negative territory.  World Beans up 4.6, Corn up 2.1 (million Tonnes).

 

Risk Disclosure – The risk of loss in trading commodities can be substantial and past performance is not necessarily indicative of future results.  Therefore, you should carefully consider whether such trading is suitable for you or your organization in light of your financial condition.  Any examples given are strictly hypothetical and no representation is being made that any person will or is likely to achieve profits or losses similar to those examples.  Neither the information, nor the opinion expressed shall be construed as an offer to buy or sell any futures or options on futures contracts.

 

Greg Mockenhaupt

ProEdge Risk Management Consultant

P: (402) 685-5613 | C: (402) 380-9855 | Greg.Mockenhaupt@cvacoop.com

1007 County Road O

Oakland, NE 68045

www.cvacoop.com

USDA Supply and Demand Balance Sheet


The USDA issued their Supply and Demand balance sheet adjustments for July this morning. These are the adjustments that are made monthly to reflect changes in global supply and demand changes for principal crops.
 
Corn:
 
The USDA reduced old crop feed demand by 125 mbu to reflect lower usage as implied by the June 30th Stocks Report. Feed demand for the 3rd quarter was down 6% at that time, resulting in the USDA’s adjustment this morning. Ethanol demand was bumped 25 mbu to account for the heavy pace in that industry. The net result is an increase of 100 mbu to the old crop carryout, putting it at 1,246 mbu…slightly above trade estimates. New crop (14/15) carryout figures were adjusted higher to reflect the larger amount of corn carried over into next year. Additionally, feed demand was lowered 50 mbu to reflect expectations of higher sorghum feeding displacing corn in feed rations. Reductions in supply due to lower acreage numbers were outweighed by the feed and carryin revisions.
 
Market Reaction: Slightly Negative – negative trend continues
 
 
 
Soybeans:
 
Old crop soybean carryout increased by 15 mbu this morning. Crush and export numbers both increased, but were offset by negative residual adjustments. It’s likely that the size of the 13/14 crop will be pushed higher at the end of this marketing year (September report). New crop saw higher adjustments to both crush and exports, but it wasn’t enough to offset the massive acreage increase that was seen in the June 30th Planted Acreage report.
 
Market Reaction: Negative
 
 
 
At 11:33 am, corn is down 6-7. Old beans are down -46, new beans down -19.
For more information contact:

Greg Mockenhaupt

Risk Management Consultant

Central Valley Ag – ProEdge

1007 County Road O

Oakland, NE 68045

Office: 402-685-5613

Cell: 402-380-9855

 
 

USDA Issues June World Supply and Demand Estimates


The USDA issued the June version of their World Supply and Demand Estimates (WASDE) at 11:00am this morning.

 

13/14 WASDE June

Carryout

(mbu)

Avg Estimate

(mbu)

May Carryout

(mbu)

June World Carryout (mmt) Avg Estimate (mmt) May World Carryout (mmt)
Corn 1,146 1,170 1,146 169.1 168.4 168.4
Soybeans 125 127 130 67.2 66.4 67.0
Wheat 593 590 583 186.1 186.2 186.5

 

 

 

 

 

 

 

 

14/15 WASDE June

Carryout

(mbu)

Avg Estimate

(mbu)

May Carryout

(mbu)

Yield

(bu/acre)

Corn 1,726 1,716 1,726 165.3
Soybeans 325 319 330 45.2
Wheat 574 552 540 42.3

 

 

Corn:

Corn futures posted some gains prior to USDA’s report, but just after its release the market shifted 3 – 4 ½ cents lower, with old crop leading the way. Today’s reaction to the report was neutral however there just seems to be no good news right now for corn, as it continues to grind lower.  No revisions were made to the domestic balance sheet on corn for either crop year. World carryout numbers were near the upper end of expectations on some upward revisions to production. Overall, the numbers were within range.

 

Soybeans:

After trading firmer in overnight trade, Soybean futures were hit with new sellers in reaction to USDA’s Supply & Demand Report.  Beans ended 8 – 17 cents lower, old crop again taking the brunt of it.  The USDA increased soybean crush demand by 5 mbu to effectively lower the carryout by the same amount. No export revisions were made, but will likely occur in subsequent reports due to the pace of soybean exports this year. World numbers were edged slightly higher, but within the range of expectations. No revisions were made to the new crop balance sheet. Like corn, major balance sheet revisions will wait until the June 30th reports.

 

 

For further information, contact:

 

Greg Mockenhaupt

Risk Management Consultant

Central Valley Ag – ProEdge

1007 County Road O

Oakland, NE 68045

Office: 402-685-5613

Cell: 402-380-9855

 
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Greg Mockenhaupt Reports Grain Markets


By Greg Mockenhaupt, Grain Market Contributor

For more maker information, contact Greg Mockenhaupt at the CVA East Hub.

May Corn -2 @ 5.11, Dec Corn -3 @ 5.06 ¾ (5/7/14 8:19am)

Corn planting remains the top concern. The USDA earlier this week reported the US corn crop at just 29% planted vs. the 5-year average of around 42%. Corn emergence is at just 7% compared to the 5-year average pace of 13%.  Nebraska is currently just 1% behind pace.  The forecast has turned a bit drier for a larger portion of the corn belt, so as the planting pace picks up its likely we will see a significant increase in progress come next week.  Talks of up to 70%.

May Beans -11 ½ @ 14.52 ½, Nov Beans – ½ @12.24 ¾ (5/7/14 8:19am)

Bean planting has starting off a bit slow with the USDA estimating 5% of the crop planted vs. the 5-year average of 11%, but thoughts are… this starts to pick up as the southern states begin to advance.  The trade will continue to watch the forecast, but there is plenty of time left for beans.

As we plant, it is easy to forget about the markets, and many producers still have a substantial amount of grain left in the bin.  A great way to maximize your cash sale is ProEdge’s bonus premium contract which adds an additional 25-30 cents to each corn bushel.  This is in exchange for an offer on your new crop corn. Depending on your location that’s getting close to $5.

ProEdge offers the same contract for your beans as well with an additional 30-40 cents per bushel.  Prices vary with market fluctuation.

Market information provided by Greg Mockenhaupt a ProEdge Grain Risk Management Consultant at Central Valley Ag’s East Hub 402-685-5613

Greg Mockenhaupt

Risk Management Consultant

Central Valley Ag – ProEdge

1007 County Road O

Oakland, NE 68045

Office: 402-685-5613

Cell: 402-380-9855

 

 

Center for Rural Affairs Receives Grant


Lyons, NE – The Center for Rural Affairs is pleased to announce that they are one of 71 projects spanning 42 states and the District of Columbia receiving support this year through the U.S. Department of Agriculture’s (USDA) Farm to School Program, an effort to better connect school cafeterias and students with local farmers and ranchers. The Lyons, Nebraska, non-profit organization the Center for Rural Affairs received a $99,600 support service grant, “Growing Connections for Farm to School: Networking and training to bring farmers and schools together” to impact students across ten schools and beyond.
“In rural and urban communities across the country, farm to school is teaching students where food comes from and how it gets to their plate, and encouraging them to make healthier food choices in the cafeteria and at home,” said Agriculture Secretary Tom Vilsack. “Farm to school programs are an investment in the health of our nation’s children and in the vibrancy of rural economies.”

Kathie Starkweather Director of Opportunities & Stewardship with the Center for Rural Affairs said, “We are excited to be able to move Farm to School into the forefront in Nebraska. It not only allows for healthier food choices for our children but it helps them understand where their food comes from and also will have an impact on local economies as local farmers supply food to schools across the state. As some of these young minds understand where and how the food they eat is grown, it might just open up an opportunity to nurture new farmers for our future, too.”

USDA Farm to School grants help schools respond to the growing demand for locally sourced foods and increase market opportunities for producers and food businesses, including food processors, manufacturers, and distributors. Grants will also be used to support agriculture and nutrition education efforts such as school gardens, field trips to local farms, and cooking classes.

The Center for Rural Affairs will use support service funds to provide training and technical assistance to both farmers and food service personnel on how to start a Farm to School program. The Center will work alongside farmers and ten schools to facilitate the connections that need to be made for successful Farm to School programs. In addition, training will be offered in farm food safety and usage for farmers and school food service personnel. Two convenings will be held to introduce farmers to food service personnel, and year two will include invitations to key people in the state who will be able to hear the success stories of programs started through this work.

According to Starkweather, two schools committed to participating in the project when the application was completed: Bancroft-Rosalie and the Santee Community school. Partners on the project include the Nebraska Department of Education Nutritional Services, the Nebraska Food Cooperative, and the Nebraska Farmers Union. In addition, we are fortunate to have the expertise of Mrs. Linda Truscott, a long-time food service director at Norris school who runs a successful long-term Farm to School program. The types of local products that students will be trying this year include a variety of fruits and vegetables, milk, cheese, eggs and meat. Please visitwww.cfra.org in the upcoming months to see how the project is progressing and the Center for Rural Affairs’ Farm to School Facebook page can be found here:https://www.facebook.com/NebraskaFarmToSchoolProgram

USDA is focused on improving childhood nutrition and empowering families to make healthier food choices by providing science-based information and advice, while expanding the availability of healthy food. USDA’s Farm to School Program is part of the Healthy, Hunger-Free Kids Act of 2010, which authorized USDA to provide grants and technical assistance to help schools gain better access to local foods. For a complete list of fiscal year 2014 Farm to School grant recipients, please see: http://www.fns.usda.gov/sites/default/files/FY_2014_Grant_Award_Summaries.pdf.

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