Friday, April 23, 2010
Hi from the Co-op!
This week I was sent a copy of my Ramble for May 16th, 2009. Here’s a short excerpt: “Yep, it’s Saturday morning! I said earlier this week that I was not going to write another “Ramble” until it was nice out! Well, today it’s cool, but the sun is out (not a cloud in the sky) and the wind is blowing. While next week’s forecast is not exactly warm, little rain is forecast. We should get some fieldwork done. Early progress report: Wheat 5%, Corn 5%, sugarbeets <5%, soybean 0%. We’ve got a long way to go!”
Jump ahead to 2010, by week’s end we should be 95% done with wheat & surgarbeets and 60-70% done with corn planting. If weather holds, corn planting will be done by the middle of next week. It’s amazing to actually be so far ahead of the 2009 planting! 5 weeks ahead!
It’s been so much fun around the co-op this spring. While every spring is a frantic time, this year has been the one least chaotic spring we have experienced in a few years.
There is a chance of rain this weekend but it is slim. There is a better chance of rain towards the end of next week. With most of our early crop in the ground, a rain would be welcome… garden variety. Give us ¾” to 1” of rain, please.
This week’s planting progress showed as of last Sunday the nation’s corn crop was 19% seeded. Expect this number to surge into the 40-45% range in next week’s report. Spring wheat planting was 20% completed and 5% in North Dakota. Expect this number to be much higher next week. Winter Wheat crop remains in excellent condition with a rating of 69% good/excellent which is 26% higher than last year at this time.
With our early & fast spring planting, the prospect is greatly improved for Papa Paul to head to Colorado next month for a grandkid(s) fix. Yippee!
Even with rapid progress on seeding our 2010 crop, cash prices had held up relatively well for both old & new crop. This week, May soybean futures closed over $10.00 this week for the 1st time since January and new crop cash beans “tickled” $9.00. RUC marketing staff makes every effort to keep our customers up-to-date with prices via texting, phone, email & our web-site. Again, you need to take advantage of any “mini” rally the market offers. While we all love our early spring, it makes the prospect of a big crop, probable. This will mean lower prices. Bottom-line, call us & put some price targets in.
In an interesting move this week, USDA announced the 2010 loan rates. Spring wheat is $3.86 in Traill & $3.83 in Grand Forks. The 2010 Durum loan rate is the one which shocked everyone. It is set @ 6.28 & $6.31, up over $1.50 from 2009. While there is very little Durum raised in our area, further west this discrepancy between spring wheat & durum loan rate could change what crop gets planted (More durum, less spring wheat).
USDA's May 11th crop report is expected to include updated information on the 2009 corn crop in North Dakota and South Dakota. When producers were surveyed last fall, a significant amount of the crop was not harvested. At the end of this month, the National Agricultural Statistics Service will re-interview producers who had reported unharvested acreage. If the new data justifies any changes, USDA will update the estimates in May.
On April 26, DDG(dried distiller grain) futures contract will be launched, making an exchange-traded ethanol crush possible. Each bushel of corn yields approximately 17.5 lbs. of DDGs, or 31.25% of the weight of a bushel of corn. At that conversion rate, each DDG contract is the equivalent of 11,428 bushels of corn. Many new contracts struggle to attract volume, but the crush relationship with existing contracts should help the DDG contract. Time will tell if this futures market will be viable & survive.
Around the World: US Scientists say world crop production should not be significantly affected by the volcano in Iceland. That's because the eruption released only a small amount of sulfur into the lower earth's atmosphere. All bets are off if the volcano intensifies and produces more ash in the weeks ahead. Big volcanic eruptions which put sulfur dioxide into the stratosphere can cause climate damage like the Mount Pinatubo eruption in 1991.
There was talk in the market this week that a fungal disease is causing some issues to the Argentina soybean crop as harvest advances. This fungus problem is not expected to threaten their record production forecasts; however, it may become a quality issue as the year goes by. Right now, the Argentina soybean crop is 28% harvested. The corn crop is 38% completed. In Brazil, the soybean harvest is now 81% in the bin.
The issue we talked about last week where China has stopped issuing import certificates for soybean oil from Argentina is still not solved. Word has it that an Argentine trade delegation will be heading to China this weekend to sit down face to face to address the issue.
One other piece of news from China this week is from China’s National Grain and Oils Information Center, predicting that China will import a record high 5 to 5.5 million tons of soybeans in May, and another 5 million tons in June. This time of the year, most of that business will come from Brazil, but the US gulf should see some activity from it.
Our local grain market was mixed this week. Wheat closed the week @ $4.97, up $.07. New crop wheat is @ $5.05, also up $.07. Corn is $2.93, down $.06. New Crop wheat is @ $3.03, down $.16. Soybeans ended the week unchanged @ $9.00 with new crop up $.16 at $8.89.
With our fabulous spring (so far) I thought I would end this week’s ramble with a few quotes on “spring”, enjoy……..
Have a great weekend, everyone!
Paul
