March 14, 2016

Grain Stocks & Prospective Plantings Reports Previews

USDA will officially kick off the new year for the spring planted crops when it releases two reports on the last day of the month.



 

The Grain Stocks and Prospective Plantings reports will be released March 31st. Darrel Good says both will help set the tone of the trade for corn and soybeans going forward.

Quote Summary - The Stocks report will be modestly important as it always is for corn. It will give us a reading on how fast we are feeding last year’s crop, but the real information will be in the Prospective Plantings report. It can be a mixed bag. This is because we all know actual plantings deviate from intentions. Certainly, though, when we see the March survey and what farmers are planning this year, it will provide a lot of information about the potential size of the upcoming crops.

The Prospective Plantings report is set up to be very interesting. More than a few acres around the United States need a new home on the spreadsheets. For instance, last fall farmers seeded about 2.8 million fewer acres of winter wheat than they did the previous year. When you couple those acres with what most expect to be fewer Prevent Plant acres, it creates an interesting combination says the University of Illinois agricultural economist.

Quote Summary - On the surface this says, “We’ll have more acres available than we had last year”. What the intentions report will give us a hint at is whether producers are thinking about leaving some acreage idle in 2016 because of the generally low commodity prices. For example, will the winter wheat acres that didn’t get planted go to fallow, or to annual pasture, or will they go to sorghum or an oilseed. Will we see some of the so called fringe areas leave some acreage idled as the numbers would suggest we’ve seen in the past when prices are low. So, that big picture question will be most important in the March plantings report.

Again, the reports will be released March 31st. Last year there were 6.7 million acres of Prevent Plant. That’s on the high side because of the heavy 2015 rainfall. Darrel Good expects this year to be something closer to 3 million acres. And, when you round up to 3 million fewer acres of winter wheat, you get about 6 million float acres that need a home this year either idled, or planted.


March 11, 2016

Illinois Soybean Summit | Rockford Edition

This morning, March 11th, DTN Progressive Farmer meteorologist Bryce Anderson told farmers at the Illinois Soybean Summit weather would cap this year’s potential yields. Todd Gleason is emceeing the event, and asked Anderson if he means it is unlikely for yields to be better than USDA’s trendline.



The Senior Grains Analyst for Farm Futures Magazine was also at the summit. Bryce Knorr told the group to reward market rallies.



The Illinois Soybean Summit took place Friday March 11, 2016 in Rockford.


March 09, 2016

WASDE Report a Shade Friendly

USDA’s March World Agricultural Supply and Demand Estimates report didn’t really change much, still that seems a shade friendlier than before to University of Illinois Agricultural Economist Darrel Good.


 

Summary Table
USDA WASDE - United States


 

U.S. Ending Stocks
2015/2016 Marketing Year

 

World Ending Stocks
2015/2016 Marketing Year (in million metric tons & billion bushels)


March 09, 2016

El Niño & 2016 Corn Yields

There continues to be an immense amount of discussion about the impact of El Niño on agriculture. Many are wondering what will happen to the Midwest corn crop this summer. Univesity of Illinois agricultural economist Darrel Good and Scott Irwin explored the historical data in order to develop some 2016 expectations. You may read their conclusions on the FarmDocDaily website. Irwin spoke at length with Univesity of Illinois Extension’s Todd Gleason about the research during WILLAg.org’s Closing Market Report.




February 29, 2016

Benchmarking Soybean Production Systems

Soybean farmers in ten states across the Midwest are being asked twenty questions. Todd Gleason has more on a Soybean Checkoff funded project to benchmark the yield impact of different production practices.


February 27, 2016

2016 Crop Insurance & 2015 ARC County

On February 18th, the National Ag Statistics Service (NASS) released county yield data for the 2015 crop year. This post uses the NASS county yields and current MYA price projections from the USDA to estimate 2015 payments for the Ag Risk Coverage county level program (ARC-CO). Note that the final yields and prices used to determine actual payment levels will differ from the values these payment estimates are based upon. The final MYA price for corn and soybeans will not be known until the marketing year ends in August, and the final yields FSA will use to determine ARC-CO payments will likely not be released until September. See the farmdoc daily article from December 1, 2015 for a more detailed discussion and comparison of NASS county yields and FSA county yields used for the ARC-CO program.

Current MYA Price Projections

The midpoint of the February WASDE range for the 2015/16 MYA corn price is $3.60 (range of $3.35 to $3.85). This is 32% below the 2015 ARC program benchmark price of $5.29. Since the ARC-CO program provides a guarantee equal to 86% of the county’s benchmark revenue, the projected corn price implies that the actual corn yield in a county can be up to 26% higher than the ARC benchmark yield to trigger a payment. For soybeans, the midpoint of the WASDE range is $8.80 (range of $8.05 to $9.55). This implies that the actual soybean yield in a county can be up to 20% above the 2015 benchmark yield to trigger an ARC-CO payment on soybean base. Counties where actual corn (soybean) yields are up to 11.7% (6%) above the benchmark yield for 2015 will trigger the maximum ARC-CO payment, which equals 10% of the county benchmark revenue.

Estimated ARC-CO Payments for Corn and Soybeans

Figure 1 illustrates estimated 2015 ARC-CO payments on corn base acres. The county yield data from NASS covers only a portion of the counties in the US where ARC-CO is available for corn. More than 70% of the counties in the US where a NASS yield was published are estimated to trigger an ARC-CO payment for corn base in 2015, with over 40% of those counties triggering the maximum payment equal to 10% of the county revenue benchmark.

title

Figure 2 shows estimated 2015 ARC-CO payments on soybean base acres. Again, NASS reported a county yield for only a portion of the counties with the ARC-CO program for soybeans. ARC-CO payments are estimated to be triggered on over 60% of counties with a NASS soybean yield reported, with more than 30% of counties triggering the maximum payment on soybean base acres.

title

Estimated ARC-CO Payments in Illinois

In Illinois the average estimated ARC-CO payment on corn base is over $65 per base acre. County level payment estimates for Illinois are illustrated in Figure 3. Payments would be triggered in over 90% of Illinois counties, and the maximum payment would be triggered for corn in roughly 2/3 of Illinois counties. Only three counties with a corn yield reported by NASS in Illinois for 2015 would not receive a payment at the current price projection of $3.60. These counties, shown in white in Figure 3, are Monroe, Piatt, and Pope. NASS reported county yield averages well above the benchmark yield levels in all three of these counties.

title

Adjusting the projected MYA price for corn to the high end of the WASDE range ($3.85) would still result in ARC-CO payments on corn base averaging over $45 per base acre across the state, with more than 75% of counties triggering payments and just over 25% of counties triggering the maximum payment.

The average estimated ARC-CO payment on soybean base in Illinois is just over $28 per base acre. Payments would be triggered in more than 70% of Illinois counties, with more than 15% of counties triggering the maximum payment. A handful of counties, located mainly in southern and east central Illinois, had reported NASS yields which were high enough to result in a zero ARC-CO payment estimate on soybean base.

Increasing the projected MYA price for soybeans to the higher end of the WASDE range ($9.55) lowers the average ARC-CO payment estimate to $6.60 per base acre with less than 40% of counties triggering a payment, and no counties triggering the maximum payment on soybean base acres.

title

Summary

Despite corn and soybean yields which generally above average in most areas in 2015, low price levels projected for corn and soybeans for the 2015/16 marketing year make ARC-CO payments for both crops likely across much of the US. Using county yields released by NASS last week, payments for ARC-CO were estimated at the midpoint of the price range in the February WASDE report for corn and soybeans. Using these yields and price levels, a large proportion of counties are expected to trigger 2015 ARC-CO payments for corn and soybeans, with a significant number of counties hitting the maximum payment level of 10% of the county benchmark revenue.

In Illinois, the ARC-CO payment for corn is estimated to average over $65 per base acre with only three counties not expected to receive a payment. For soybeans, the average ARC-CO payment estimate is just over $28 per base acre in Illinois, again with the majority of counties expected to receive some payment.

2015 ARC-CO payments are only provided as estimates at this time. The final yields used in calculating payments can differ from the yields released by NASS, and will also cover additional counties in the US. The final MYA price levels for corn and soybeans will not be known with certainty until the marketing year ends in August. However, where NASS yields are available, estimates for the 2015 ARC-CO payment levels can be helpful for planning purposes.


February 19, 2016

A Weather Market for Corn in 2016

Nearby corn futures remain above the early January lows, but continue to struggle under the weight of a number of negative market fundamental factors. Todd Gleason has more on the prospects for higher corn prices later this year.


Page 6 of 16 pages ‹ First  < 4 5 6 7 8 >  Last ›