January 15, 2015

All Day Ag Outlook Tickets (217) 333-7300

The March 10th meeting includes a continental breakfast and Beef House Lunch!!!  Tickets are 25 dollars.

All-Day Ag Outlook Meeting Schedule
 March 10, 2015 - The Beef House - Covington, Indiana

Registration 8:45am eastern (7:45am central)

Soybean Commodity Panel
 Curt Kimmel, Bates Commodities, Normal, Illinois
 Wayne Nelson, L and M Commodities, New Market, Indiana
 Mike Zuzolo, Global Commodity Analytics, Lafayette, Indiana
 Bill Mayer, Strategic Farm Marketing, Champaign, Illinois

Cash Grain Panel
 Greg Johnson, The Andersons, Champaign, Illinois 
 Aaron Curtis, MIDCO, Bloomington, Illinois
 Matt Bennett, Channel Seeds, Windsor, Illinois
 Chuck Shelby, Risk Management Commodities, Lafayette, Indiana

Commodity Futures
 Sue Martin, Ag and Investment Services, Webster City, Iowa

Land Values 2013
 Murray Wise, CEO, Murray Wise Associates LLC, Champaign, Illinois

Corn Panel
 Dan Zwicker, CGB Enterprises, Mandeville, Louisiana
 Pete Manhart, Bates Commodities, Normal, Illinois
 Jacquie Voeks, Stewart Peterson Group, Champaign, Illinois
 Bill Gentry, Risk Management Commodities, Lafayette, Indiana


January 24, 2015

Issues Stemming from January USDA Report

The final 2014 crop production numbers delivered by USDA in the January reports leave three issues unresolved.The three problems, as identified by University of Illinois Ag Economist Darrel Good, center on the number of corn and soybean acres planted, the surprisingly small amount of corn used in the first three months of the marketing year, and the surprisingly large number of soybeans consumed in that same time frame. 

The first issue is that the difference between the total number of planted acres USDA NASS has reported over time and those officially reported by farmers to FSA has grown. The number of acres planted to wheat, corn, and soybeans as tallied by USDA NASS has steadily grown larger than the number of acres farmers are telling FSA they've sown. USDA has not offered an explanation. The difference in 2014 is nearly 9.3 million acres over the three crops says Darrel Good. 

He says the changing relationship between NASS acreage estimates and acreage reported to FSA may make early FSA reports less useful in anticipating NASS final acreage estimates.

The second issue is related to how much corn was used in the months of September, October, and November. Those are the first three months of the marketing year. USDA totals 4.25 billion bushels of disappearance of which feed and residual use accounted for 2.198 billion. This number is a 114 million bushels lower than the usage in the same period last year after it was revised down. The problem says the U of I number cruncher is that over time the range of usage represented in the first quarter figure as compared to total usage for the year has gotten wider.

First quarter use is no longer a reliable forecaster of total marketing year consumption.

It means a lot of uncertainty will persist in the marketplace about how much corn is being fed to livestock.The numbers do get better as time passes during the marketing year. The expectation is the March 31 Grain Stocks report will be more accurate.

The third issue with the January USDA figures is also in the consumption numbers. The implied residual disappearance of soybeans in the first quarter set a record. This might mean the size of the 2014 soybean crop was over estimated. While this is an issue, it will not be resolved for several months. Some insight will be forthcoming from the March Grain Stocks report. 

Time will eventually fix all three issues, but it is important to recognize them and the potential changes these may bring to the commodity markets.

Read Darrel Good's Original FarmDocDaily Post


January 23, 2015

Relaunching the Farm Bill Toolbox

There is a toolbox of sorts on the web that farmers and landowners can use to help them decide which of the new farm programs they'll use. The decisions need to be made by the end of February and March.


January 19, 2015

Dramatic Changes in the Ethanol/Gasoline Relationship

The plummeting price of gasoline has caused a dramatic change in the relationship between the price of corn and the price of gasoline. However, this means little for how much ethanol will be produced and consumed.
 


January 17, 2015

Farmers May Not Benefit From Bumper Crops

Corn and soybean farmers harvested a bumper crop in 2014 — a record 14.2 billion bushels of corn and a record 3.97 billion bushels of soybeans, according to the U.S. Department of Agriculture. Here & Now’s Jeremy Hobson spoke with Chad Hart, an agricultural economist at Iowa State University, about what the record crop means for the farmers’ revenue, since they’re selling the crops at a lower price.

Here & Now airs during the noon hour on WILL AM580.


January 10, 2015

Riding the Feeder Cattle Roller Coaster

Futures prices were limit-down for 5 days in a row in mid-December 2014, the most limit-move days in a livestock contract since the BSE (mad cow) selloff in December 2003. Daily price limits in feeder cattle futures were increased from 3 cents per pound ($3/cwt) to 4½ cents per pound ($4.50/cwt), with provisions for additional expansions if needed; complete details are presented here.

For the 22 trading days in December 2014, the January 2015 feeder cattle futures contract had 10 days with price moves up or down of 3 cents per pound or more. And on the first trading day of January 2015, prices closed limit-up at the new 4½ cent daily limit, starting out the New Year with a bang (Figure 1). In contrast, February 2015 live cattle futures have had just 2 limit days (both down) since December 1, and February 2015 hog futures have had none.

So why have feeder cattle prices been so volatile lately? It helps to think about feeder cattle prices as the "shock absorber" between fed cattle prices on one end, and corn prices on the other. When buying feeder cattle, feedlots look at the gross feeding margin, which is the difference between the amount received when fed cattle are marketed and the amounts paid for corn and feeder cattle, the two major inputs.

Cattle feeders have little direct influence over fed cattle prices and corn prices, but feeder cattle prices are different. If the gross feeding margin is positive, feedlots have room to bid up feeder cattle prices; if the margin is negative, feedlots eventually back away, which puts downward pressure on feeder cattle prices. A concise overview of cattle feeding margins with detailed examples is available here and the importance of feeding margins was highlighted in an earlier farmdoc daily article (farmdoc daily, September 12, 2014).
 
With this in mind, let's look at what has been happening to fed cattle and corn prices. Fed cattle prices climbed to record levels in 2014 (Figure 2), due to tight supplies of beef and strong demand from domestic and overseas consumers. However, beef prices stalled at the beginning of December (Figure 3), leading to the downturn in fed cattle prices shown by the red arrow in Figure 2, and the selloff in feeder cattle futures in Figure 1.
 
In contrast, beef prices fell nearly twice as much in August and September 2014 (blue arrow in Figure 3) as in December 2014 (red arrow in Figure 3), and lower beef prices dragged down fed cattle prices, but it caused only a blip in feeder cattle prices. What made December different?

The answer is corn prices, which dropped 50 cents per bushel or more between early August and the mid-September harvest lows. Those lower corn prices offset the effects of lower fed cattle prices in the gross feeding margin calculation, so that feeder cattle prices remained firm. It was a much different story in mid-December. Corn prices were $1.00 per bushel higher than the harvest lows and had been putting pressure on feeder cattle prices. When beef and fed cattle prices weakened, feeder cattle prices had nowhere to go but down.

Feeder cattle futures have since recovered about one-half of the mid-December losses, and the question on many minds is, "Where do we go from here?" The events of the past month are a useful lesson to buyers and sellers of feeder cattle. While it's tempting to watch just fed cattle prices or just corn prices, it's important to keep an eye on both markets - or better yet, on gross feeding margins - to gauge the future direction of feeder cattle prices.

January 07, 2015

New Web Site Design

  • WILLAg WEBSITE - Illinois Public Media has updated our website. We'll do some adjusting along the way and are hopeful you'll let us know what changes should be made. Email Dave  with your ideas.


January 01, 2015

International Year of Soils

The United Nations Food and Agriculture Organization has designated 2015 the International Year of Soils. The organization hopes to raise awareness of the need to protect productive soils around the planet. It has entrusted a Global Soil Partnership with this task. The partnership has five pillars of action.

 

The 5 pillars of action

The Global Soil Partnership will support the process leading to the adoption of sustainable development goals for soils.

It will contribute to environmental wellbeing through, for example, preventing soil erosion and degradation, reducing greenhouse gas emissions, promoting carbon sequestration and promoting sustainable use of agricultural inputs for soil health and ecosystems management.

It will equally contribute to human wellbeing and social equity through improved use and governance of soil resources, finding alternatives to soil degrading practices through participatory experiential processes, and being sensitive to issues of gender and rights of indigenous peoples.

The 
In order to achieve these objectives, the GSP should address five main pillars of action:

  • Promote sustainable management of soil resources for soil protection, conservation and sustainable productivity
  • Encourage investment, technical cooperation, policy, education awareness and extension in soil
  • Promote targeted soil research and development focusing on identified gaps and priorities and synergies with related productive, environmental and social development actions
  • Enhance the quantity and quality of soil data and information: data collection (generation), analysis, validation, reporting, monitoring and integration with other disciplines
  • Harmonization of methods, measurements and indicators for the sustainable management and protection of soil resources

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