KSU Weekly Grain Market Analysis: Hints of encouraging news re: grain usage/demand and HRW-Wheat crop warnings

Grain market summary notes, charts and comments ahead of the KSU Agriculture Today Grain Outlook to played on Friday, November 21st  are up on  the Kansas State University www.AgManager.info website at the following web address: http://www.agmanager.info/news/Articles/KSRN_GrainOutlook_11-21-14.pdf

The recorded radio program will be aired at 10:03 a.m. central time, Friday, November 21st on the K-State Radio Network (here) – web player available.  At this time the program, the recording can also be listened to via a link from the following website in the “Radio Interviews” section: http://www.agmanager.info/news/default.asp

http://upload.wikimedia.org/wikipedia/commons/3/35/Ethanol_plant.jpg

Ethanol Plant in West Burlington, Iowa, USA (Source of image: http://en.wikipedia.org/wiki/Corn_ethanol)

http://en.mercopress.com/data/cache/noticias/39562/0x0/soja-vsl.jpg

 

Loading Soybeans in South America for Export in 2013 (Source: http://en.mercopress.com/2013)

KSU Wheat Market Outlook in November 2014

An analysis of U.S. and World Wheat supply-demand factors and price prospects based on information from the November 10, 2014 USDA Crop Production and World Agricultural Supply and Demand Estimates (WASDE) reports have been placed up on the KSU AgManager website (http://www.agmanager.info/default.asp).

Following is a summary – with the full analysis-article for Wheat to be found at the following web address: http://www.agmanager.info/marketing/outlook/newletters/Wheat.asp

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Summary

Overview

Since the USDA released its World Agricultural Supply and Demand Estimates (WASDE) report on November 10, 2014, U.S. wheat market prices have generally responded in a neutral-to-positive manner to projections of marginally larger World wheat ending stocks and ending stocks-to-use, but lower U.S. domestic supply-demand balances. The USDA projected for the “new crop” 2014/2015 marketing year that a) World wheat production, supplies, and total use would be at record high levels, b) World wheat export trade would be 6.6% lower than a year ago but still the third highest on record, and c) World wheat ending stocks and percent ending stocks-to-use would be at their highest levels in three marketing years, although still less than during the 2009/2010 through 2011/2012 period. Wheat prices in the U.S. are projected to be down to the lowest levels in four years due to limited demand for U.S. wheat exports and for domestic livestock wheat feeding.
The USDA projects that foreign wheat supplies are more than adequate to “mitigate” shortfalls in 2014 U.S. hard red winter wheat production in the Central and Southern plains states. Also, no other major production problems in competing World wheat exporting countries have yet emerged to the degree that the “large crop-over supply” situation in World wheat markets has been affected. That said, there are preliminary concerns emerging about dry wheat production conditions in Australia, as well as crop quality problems in parts of Europe. United States’ wheat exports have been reduced by a recent strong positive trend in the U.S. dollar. The wheat market will now likely focus on weekly export sales and shipments, the condition of U.S. and foreign crops in the field, and the upcoming January 12, 2015 USDA NASS Crop Production Annual Summary report.

USDA U.S. Wheat Forecast for “New Crop” MY 2014/15

The USDA projected lower 2014 U.S. wheat production, reduced wheat total use, an increase in ending stocks and % stocks-to-use, and lower prices in “new crop” MY 2014/15 versus a year ago. The USDA’s projected MY 2014/15 scenario is: 56.8 million acres (ma) planted, 46.4 ma harvested, 43.7 bu/ac yield, a 2.026 billion bushel (bb) 2014 U.S. wheat crop (down 9 mb), 2.785 bb total supplies (down 10 mb), 925 mb exports, 2.141 bb total use, 644 mb ending stocks (down 10 mb), 30.1% ending stocks-to-use (down from 30.6% last month), and a forecast U.S. price of $5.90 per bu. (range of $5.65 to $6.15) – narrower by $0.10 /bu on each end of the price range from the October WASDE.

KSU U.S. Wheat Forecast for “New Crop” MY 2014/15

KSU projections of “new crop” MY 2014/15 supply-demand balances and prices are essentially equal to the USDA’s except for the possibility of either “Lower Export” or “Higher Export” scenarios, which are as follows: a) “Lower Export” Scenario: 10% prob. of acreage, yields, production and total supplies being the same as those of the USDA, but with 125 mb less U.S. wheat exports. This would result in 800 mb exports, 2.016 bb total use, 769 mb ending stocks, 38.15% S/U, and a forecast price of $5.00-5.60 /bu (midpoint of $5.30 – down from $5.90 for the USDA); and b) “Higher Export” Scenario: 10% prob. of acreage, yields, production and total supplies being the same as those of the USDA, but with 125 mb more U.S. wheat exports. This would result in 1.050 bb exports, 2.266 bb total use, 519 mb ending stocks, 22.9% S/U, and a forecast price of $7.00 /bu (up from the USDA midpoint of $5.90).

USDA World Wheat

World wheat total supplies of 905.6 mmt in “new crop” MY 2014/15 are up from 889.5 mmt in “old crop” MY 2013/14, and up from 854.1 mmt in MY 2012/13. Projected World wheat ending stocks in “new crop” MY 2014/15 of 192.9 mmt (27.1% S/U) are up from 185.7 mmt (26.4% S/U) in “old crop” MY 2013/14, and from 174.8 mmt (25.7% S/U) in MY 2012/13. For perspective, these figures can be compared to the historic World wheat stocks minimum of 129.0 mmt (21.0% S/U) in MY 2007/08. Year-over-year increases are projected for wheat exports in “new crop” MY 2014/15 for Argentina (+3.8 mmt), Brazil (+0.9 mmt), Russia (+4.0 mmt), and Ukraine (+0.24 mmt), with decreases forecast for the U.S. (-6.8 mmt), Australia (-1.1 mmt), Canada (-1.2 mmt), the EU (-3.9 mmt), India (-2.9 mmt), and Kazakhstan (-2.8 mmt).

United States Monthly Drought Outlook Graphic - click on image to enlarge

U.S. Monthly Drought Outlook (Source: http://www.cpc.ncep.noaa.gov/products/expert_assessment/mdo_summary.html)

http://www.kansas.com/incoming/hh4hng/picture876745/alternates/FREE_960/1105westernksChalk Pyramids in the Smoky Hill / Smoky River Region of Western Kansas (Source: http://www.kansas.com/news/article986935.html)

“El Nino Warning Raised by Australia..” Bloomberg article (11/18/2014)

As the El Nino weather pattern “heats up” there is a greater likelihood of disruptive weather in major grain and oilseed growing areas of the world, such as Australia (too dry) and South America (wetter than usual).  This disruptive weather pattern bears watching as it is increasingly likely to increase the volatility of U.S. and World grain prices.

http://www.bloomberg.com/news/print/2014-11-18/el-nino-warning-raised-by-australia-as-tropical-pacific-sizzles.html

El Nino Warning Raised by Australia as Tropical Pacific Sizzles

Australia raised an El Nino warning after the Pacific Ocean showed renewed signs of the pattern that can bring drought to parts of Asia and heavier-than-usual rain to South America.

Climate models suggest current conditions will persist or strengthen, prompting the status to be elevated from watch to alert, the Bureau of Meteorology said on its website today. The alert indicates at least a 70 percent chance of El Nino, it said.

The bureau had previously pushed back projections for the onset of El Nino as changes to the atmosphere failed to develop consistently. The odds of the event during the Northern Hemisphere winter are 58 percent, the U.S. Climate Prediction Center said on Nov. 6. El Ninos can roil agricultural markets worldwide as farmers contend with drought or too much rain.

“Above-average temperatures in the tropical Pacific Ocean have warmed further in the past fortnight, while the Southern Oscillation Index has generally been in excess of El Nino thresholds for the past three months,” the Australian bureau said. “International climate models expect the warm tropical Pacific Ocean temperatures to persist, with most models predicting values will remain near or beyond El Nino thresholds for the next two to three months.”

El Ninos, caused by periodic warmings of the tropical Pacific, occur every two to seven years and are associated with warmer-than-average years. The last El Nino was from 2009 to 2010, and the Pacific has either been in its cooler state, called La Nina, or neutral since then.

The weather bureau previously issued an El Nino alert on May 6, predicting an event may develop as early as July. That was downgraded to watch on July 29.

Not all indicators have shifted toward El Nino, with tropical cloudiness near the Date Line and trade wind strength close to average, suggesting the atmosphere is still not firmly linked with the warmer ocean, the bureau said today.

To contact the reporter on this story: Phoebe Sedgman in Melbourne at psedgman2@bloomberg.net

To contact the editors responsible for this story: James Poole at jpoole4@bloomberg.net Ovais Subhani, Claudia Carpenter

 

http://weather.thefuntimesguide.com/images/blogs/rough-waters-from-storm-by-shellorz.jpg

El Nino and Its Affects on Global Weather Patterns (Source: http://weather.thefuntimesguide.com/2009/10/el_nino_effects.php)

KSU Corn Market Outlook in November 2014: Perspectives on 2014/15 and 2015/16 Corn Market Price Prospects

An analysis of U.S. and World corn supply-demand factors and 2014 price prospects following the USDA’s November 10th USDA Crop Production and World Agricultural Supply Demand Estimates (WASDE) reports is available on the KSU AgManager website  (http://www.agmanager.info/default.asp).

Following is a summary of the article on “Corn Market Outlook in November 2014″ with the full article and accompanying analysis will soon be available on the KSU AgManager website at the following web address: http://www.agmanager.info/marketing/outlook/newletters/archives/GRAIN-OUTLOOK_11-18-14_Corn.pdf

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Summary

Introduction

Since the USDA released its Crop Production and World Agricultural Supply and Demand Estimates (WASDE) reports on November 10th, DEC 2014 and JULY 2015 corn futures prices have moved sideways to higher, raising hopes of an eventual return to storage for U.S. crop producers resisting sales at sub-$4.00 cash prices. With 1) a record high 2014 U.S. corn crop, and 2) prospects for record or near-record World corn production and ending stocks in the “new crop” 2014/15 marketing year, “new crop” corn price prospects will be limited – unless unexpected and substantial crop production problems occur in other major coarse grain production regions of the World. Absent a shortfall in World feedgrain market supply-demand balances, price prospects are likely to be limited until April-May 2015 – the beginning of the U.S. corn planting and growing season.

USDA U.S. Corn Forecast for “New Crop” MY 2014/15

The USDA forecast 2014 U.S. corn production to be a record 14.407 billion bushels (bb), based on projected planted and harvested acreage of 91.885 million acres or ‘ma’, and 83.097 ma, respectively, and a record 2014 U.S. corn yield of 173.4 bushels per acre. The USDA also projected record U.S. corn total supplies of 15.668 bb, up 6.0% from 14.782 bb a year earlier. Projected MY 2014/15 total corn usage of 13.660 bb is also a record, with ethanol use of 5.150 bb (up 16 mb from MY 2013/14), non-ethanol FSI use of 1.385 bb (up 22 mb), exports of 1.750 bb (down 167 mb), and feed and residual use of 5.375 bb (up 243 mb). “New crop” ending stocks are forecast at 2.008 bb – up from 1.236 bb (9.1% S/U) in “old crop” MY 2013/14, and from 821 million bushels or ‘mb’ (7.4% S/U) in MY 2012/13. The USDA forecast that “new crop” MY 2014/15 U.S. average cash corn prices will be in the range of $3.20-$3.80 per bushel with a midpoint of $3.50 – down from $4.46 in “old crop” MY 2013/14, and $6.89 in MY 2012/13.

KSU U.S. Corn S/D Forecast for “New Crop” MY 2014/15

An alternative projection by KSU to the USDA for “new crop” MY 2014/15 U.S. corn supply-demand and prices is as follows: “Increased Usage” Scenario: 40% prob. of 15.668 bb U.S. corn supplies (same as USDA), 13.955 bb total use (up 2.2% from USDA), 1.713 bb ending stocks, 12.3% S/U, & $3.95 /bu U.S. corn price.

KSU U.S. Corn S/D Forecast for “Next Crop” MY 2015/16

A KSU projection for “next crop” MY 2015/16 for U.S. corn is as follows: “2015 Less 3 Million Acre” Scenario: 88.885 ma planted in 2015, 80.885 ma harvested, trend yields of 162.7 bu/ac, 2015 U.S. corn production of 13.073 bb, U.S. corn supplies of 15.106 bb, total use of 13.650 bb, ending stocks of 1.456 bb, 10.7% S/U, & $4.15 /bu U.S. corn season average prices.

World Corn Supply-Demand

World total supplies of 1,163 mmt are projected for “new crop” MY 2014/15, up from 1,127 mmt in “old crop” MY 2013/14, and up from 1,002 mmt in MY 2012/13. Projected World corn ending stocks of 191.5 mmt (19.7% S/U) in “new crop” MY 2014/15 are up from 173 mmt (18.1% S/U) in “old crop” MY 2013/14, and from 138 mmt (15.9% S/U) in MY 2012/13.

Major Export Competitors Situation

Combined “new crop” MY 2014/15 corn production for the U.S.’ major export competitors Brazil (75.0 mmt – down 4.3) and Argentina (23.0 mmt – down 2.0) is projected to be down 6.3 mmt from “old crop” MY 2013/14. Forecast Ukraine 2014 corn production of 27.0 mmt is down 3.9 mmt from a year ago. South American acreage decisions either have been or are being made now for first planting of 2015 crops in the Nov-Dec 2014 period, with subsequent additional plantings coming after the first of the year.

U.S. Corn versus Soybean Acreage Decision for 2015

With closing CME NOV-2015 soybean futures of $10.25 and CME DEC-2015 corn futures of $4.21 ½ on 11/17/2014, the ratio of 2.43 may slightly favor soybeans (i.e., being greater than the customary 2.3 breakeven level). If South American farmers shift sizable acreage away from corn into 2015 soybeans – markedly diminishing 2015 production prospects, and/or have weather-induced 2015 corn production problems, then by March-April 2015 World corn market price prospects for “next crop” MY 2015/16 could be positively effected – which could impact U.S. farmers’ 2015 spring planting choices.

 

 

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U.S. Corn in Storage in 2011 (Source: http://www.indianagrain.com/blog/corn-harvest-continues-to-impress)

http://www.zimmcomm.biz/images/corn/distillers-grains.jpg

Corn for use in livestock feed i 2008 (Source: http://corncommentary.com/2008/09/26/tons-of-livestock-feed/)

“Cold Temperatures Expected to Affect Wheat in Kansas” (KSU Article, 11/14/2014)

Cold Temperatures Expected to Affect Wheat in Kansas

Drought-stressed plants more likely to suffer from cold temperatures.

MANHATTAN, Kan. – The sudden sharp drop in temperatures across Kansas during the week of Nov. 10-15 will certainly cause the wheat crop to go into dormancy. Whether it will injure the wheat to any degree depends on several factors, said Jim Shroyer, K-State Research and Extension crop production specialist.

“The moisture level in the topsoil will be important. Soil moisture was generally good in most of the state going into October. But the warm temperatures in October caused some of the wheat in the state to put on excessive amounts of top growth, which dried out the soil,” Shroyer said.

The cold weather will be more likely to cause injury to wheat if the plants were showing drought stress symptoms, he said. Also, dry soils will get colder more easily than wet soils.

Another important factor in wheat’s response to the cold is whether the wheat had time to become properly cold hardened, he added.

“Although the weather was warm overall in October and early November, there may have been enough cold nights to have allowed the wheat to develop cold hardiness,” Shroyer said.

The extent of the unusually large and rapid drop in temperatures from well above normal to well below normal is a concern, he added. If the wheat did not develop sufficient cold hardiness, it would become more susceptible to injury from the recent cold snap.

“We likely won’t know for sure about cold injury until next spring as the wheat comes out of dormancy,” he said.

The first thing producers will be seeing is a lot of burn down of the wheat from these cold temperatures, Shroyer explained. If the wheat was bigger than normal, the plants may look “rough” with a lot of brown dead-looking foliage on the soil surface, he said.

“That doesn’t mean the plants are dead, however. The important factor will be whether the crown below the soil surface remains alive. Having a well-developed secondary root system will help the plants survive,” Shroyer said.

Weblink for Article: http://www.ksre.ksu.edu/news/story/coldtempwheat111414.aspx

See a similar article by Bob Burgdorfer of Farm Futures, published last week: http://farmfutures.com/story-colorado-nebraska-wheat-damaged-overnight-cold-0-120269

http://farmfutures.com/cdfm/Faress1/author/252/2013/12/grain_markets_higher_temperatures_drop_1_635216658776720000.jpg

KSU Weekly Grain Market Analysis: Grains trekking into winter-spring 2015 “store-sell” mode

Grain market summary notes, charts and comments ahead of the KSU Agriculture Today Grain Outlook to be played on Friday, November 14th will be placed up on  the Kansas State University www.AgManager.info website at the following web address within a short time: http://www.agmanager.info/news/Articles/KSRN_GrainOutlook_11-14-14.pdf

The recorded radio program will be aired at 10:03 a.m. central time, Friday, November 14th on the K-State Radio Network (here) – web player available.  At this time the program, the recording will be available for listening to via a link from the following website in the “Radio Interviews” section: http://www.agmanager.info/news/default.asp

Following are some key parts of this KSU weekly grain market update report:

Slide1 Slide2 Slide3 Slide4 Slide5 Slide6 Slide7 Slide8

KSU Wheat Market Outlook – Prospects for U.S. Wheat Markets through Summer 2015

Following are parts of the Grain Market Outlook for 2014-2015 to be presented in the 2014 K-State Insurance Workshop in Salina, Kansas on Thursday, November 13, 2014.  This year’s workshop will focus on topics pertinent to the Kansas Crop Insurance Industry. Registration information and program details are available at the following web address: http://www.agmanager.info/events/Insurance/2014/Default.asp

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Following is the full Wheat Market portion of the “Grain Market Outlook for 2014-2015” presentation to be given by Daniel O’Brien of KSU on Thursday, November 13th, with price information current through Monday, November 10, 2014.

Slide1 Slide6 Slide7 Slide8 Slide9 Slide10 Slide40 Slide41 Slide42 Slide43 Slide44 Slide45 Slide46 Slide47 Slide48 Slide49 Slide50 Slide51 Slide52 Slide53 Slide54 Slide55 Slide56 Slide57 Slide58 Slide59 Slide60 Slide61