KSU Weekly Grain Market Analysis: Aftermath of the April 9th USDA WASDE Report

Grain market summary notes, charts and comments ahead of the KSU Agriculture Today Grain Outlook to played on Friday, April 10th  are up on  the Kansas State University www.AgManager.info website at the following web address: http://www.agmanager.info/news/Articles/KSRN_GrainOutlook_04-10-15.pdf

The recorded radio program will be aired at 10:03 a.m. central time, Friday, April 10th 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

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KSU “Quick Analysis” of the ‘Numbers’ in the USDA April 9, 2015 WASDE Report for Grains

A KSU “quick analysis” worksheet of the key grain marketing-related information found in the April 9th USDA Crop Production and World Agricultural Supply and Demand Estimates (WASDE) reports can be found on the Kansas State University AgManager.info website (http://www.agmanager.info/). The specific web address for this downloadable MS Excel Spreadsheet is found here:  http://www.agmanager.info/marketing/outlook/newletters/default.asp

The spreadsheet contains a comparison of USDA April 10th U.S. and Foreign grain supply-demand and market supply-demand forecasts for the “current crop” 2014/15 marketing year for corn, wheat, soybeans and grain sorghum, with comparisons to a) pre-report trade estimates, and b) last month’s (March 10, 2015) USDA grain production and other supply-demand projections.  Key information is contained on the following:

A. Brazil, Argentina and Total World crop production forecasts for 2015 corn, grain sorghum, wheat and soybeans.

B. Updated U.S. & World ending stocks projections for the “old crop” 2013/14 marketing year as well as for the “current” 2014/15 marketing year for major crops (corn, sorghum, wheat, and soybeans).

C. Updated U.S. & World ending stocks projections for the “new crop” 2014/15 marketing year for major crops & crop categories (corn, coarse grains, wheat, and soybeans).

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Recommended Farmdoc Article re: 2015 U.S. Crop Planting Intentions Questions (Good and Irwin)

Agricultural Economists Darrel Good and Scott Irwin of the University of Illinois have an outstanding article on “The Acreage Puzzle” on the Farmdoc web site.  This article provides a quantified analytical perspective on questions about what seems to be unexpectedly low U.S. crop planted acreage totals as reported in the 2015 USDA Prospective Plantings report released on March 31, 2015.

Their final summary idea is that it would not be a surprise to see 2015 U.S. crop acreage – especially for U.S. soybeans – end up being somewhat higher than indicated by the USDA on March 31st.

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April 2, 2015

The Acreage Puzzle

Darrel Good and Scott Irwin

Department of Agricultural and Consumer Economics
University of Illinois

farmdoc daily (5):61


Recommended citation format: Good, D., and S. Irwin. “The Acreage Puzzle.” farmdoc daily (5):61, Department of Agricultural and Consumer Economics, University of Illinois at Urbana-Champaign, April 2, 2015.

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U.S. corn and soybeans side by side (Source of image: http://fieldcrop.msu.edu/ )

KSU Weekly Grain Market Analysis: Post-Planting and Stocks, On to a 2015 Crop Production Focus

Grain market summary notes, charts and comments ahead of the KSU Agriculture Today Grain Outlook Radio program to played on Friday, April 3rd are available on the Kansas State University www.AgManager.info website at the following web address: http://www.agmanager.info/news/Articles/KSRN_GrainOutlook_04-03-15.pdf

The recorded radio program will be aired at 10:03 a.m. central time, Friday, April 3rd on the K-State Radio Network (here) – web player available.  After the program has run, 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

Following are sections of the working notes prepared for the April 3rd radio program:

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KSU “Quick Analysis of the Numbers” of the 3/31/2015 USDA Grain Stocks Report

Today on March 31, 2015 the USDA National Agricultural Statistics Service (NASS) released its 2015 Prospective Plantings Report and its March 1, 2015 Quarterly Stocks Report.  Following are the key findings in the Grain Stocks report by major crop:

A. U.S. Corn

U.S. Corn Stocks on March 1, 2015 = 7.745 billion bushels (bb)……..Up 136 million bushels (mb) from prereport expectations, and up from 7.008 bb on 3/1/2014, 5.400 bb on 3/1/2013, and 6.023 bb on 3/1/2012. The 67% confidence interval for this USDA forecast is from 7.582 to 7.908 bb, implying that his estimate could still change considerably in future Quarterly Grain Stocks reports.

U.S. Corn Usage during December 2014 – February 2015  = 3.467 bb……..Down 277 mb from implied prereport expectations, but comparable to 3.444 bb in Dec-Feb 2014, 2.633 bb in Dec-Feb 2013, and 3.623 bb in Dec-Feb 2012.

On-Farm Storage of U.S. corn is estimated to be 4.38 bb, up 13% from a year earlier, and indicative of a large amount of unsold U.S. corn yet on “current crop” 2014/15 that is likely to be a negative factor in U.S. corn cash prices in coming months (absent a weather-related, negative set of production factors in the summer of 2015).   Off-Farm Commercial Storage of U.S. corn is estimated to be 3.36 bb, up 7% from a year earlier, also indicative along with On-farm storage amounts, and a negative outlook for U.S. corn prices this summer.

Market Implications => Higher than expected March 1, 2015 U.S. corn stocks and lower than expected Dec-Feb 2015 U.S. corn use is likely to be interpreted as negative for U.S. corn markets. However, Dec-Feb 2015 U.S. corn usage is still the highest in 3 years – even with just a moderate pace of U.S. corn exports during this time period.

B. U.S. Grain Sorghum

U.S. Grain Sorghum Stocks on March 1, 2015 =119 million bushels (mb)……..Down 7 mb from prereport expectations, and down from 176 mb on 3/1/2014.  However, this amount is larger than 92 mb on 3/1/2013, and 108 mb on 3/1/2012.  The 67% confidence interval for this USDA forecast is from 85 to 152 mb, implying as for other major U.S. crops that his estimate could still change considerably in future Quarterly Grain Stocks reports.

U.S. Grain Sorghum Usage during December 2014 – February 2015  = 104 mb……..Up 1 mb from implied prereport expectations, but up considerably from 56 mb in Dec-Feb 2014, 48 mb in Dec-Feb 2013, and 43 mb in Dec-Feb 2012.

Market Implications => Strong exports of U.S. grain sorghum during the Dec-Feb 2015 period have been a major factor in usage being nearly double the amount used during the previous three (3) Dec-Feb periods. This is a supportive, bullish result for U.S. grain sorghum markets and local grain sorghum basis.

C. U.S. Wheat

U.S. Wheat Stocks on March 1, 2015 =1.124 billion bushels (bb)……..Down 16 mb from prereport expectations, and up from 1.057 bb on 3/1/2014.  However, this amount is smaller than 1.235 bb on 3/1/2013, and 1.199 bb on 3/1/2012.  The 67% confidence interval for this USDA forecast is from 1.066 to 1.183 bb, indicating that this estimate could still change considerably in future Quarterly Grain Stocks reports.

U.S. Wheat Usage during December 2014 – February 2015  = 405 mb……..Down 36 mb from implied prereport expectations, and down from 418 mb in Dec-Feb 2014, 436 mb in Dec-Feb 2013, and 463 mb in Dec-Feb 2012.

Market Implications => Weak exports of U.S. wheat during the Dec-Feb 2015 period and moderate-to-poor wheat feeding have been a major factor in usage being less than the amount used during the previous three (3) Dec-Feb periods. This is a negative, bearish result for U.S. wheat markets and likely also for local wheat basis.  However, concerns about growing conditions for winter wheat in the U.S. may mitigate this factors and begin to play a major role in U.S. wheat market direction in coming weeks and months.

D. U.S. Soybeans

U.S. Soybean Stocks on March 1, 2015 =1.334 billion bushels (bb)…….., Record high, but down 70 mb from prereport expectations, and up from 998 million bushels (mb) on 3/1/2014 and from 994 mb on 3/1/2013.  However, this amount is smaller than 1.374 bb on 3/1/2012.  The 67% confidence interval for this USDA forecast is from 1.254 to 1.414 bb, indicating that this estimate could still change considerably in future Quarterly Grain Stocks reports.

U.S. Soybean Usage during December 2014 – February 2015  = 1.194 bb……..Up 16 mb from implied prereport expectations, and up considerably from from 1.160 bb in Dec-Feb 2014, 968 mb in Dec-Feb 2013, and 995 mb in Dec-Feb 2012.

On-Farm Storage of U.S. soybean is estimated to be 609 mb, up 60% from a year earlier, and indicative of a large amount of unsold U.S. soybeans yet on “current crop” 2014/15 – that (similar to corn markets) is likely to be a negative factor in U.S. soybean cash prices in coming months (absent a weather-related, negative set of U.S. soybean production factors in the summer of 2015).   Off-Farm Commercial Storage of U.S. soybeans is estimated to be 725 mb, up 18% from a year earlier, also indicative along with On-farm storage amounts, and a negative outlook for U.S. soybean prices this summer.

Market Implications => At face value, this report is “moderately supportive” for U.S. soybean markets, with marginally lower than expected March 1st U.S. soybean stocks, and marginally higher than expected Dec-Feb 2015 usage.  Although soybean market prices are relatively low compared to recent years, these numbers support the idea that lower prices have supported soybean usage during Dec-Feb 2015.

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The Smoky Hill River near Salina in Central Kansas (Source: http://www.kansastravel.org/kansastravelblog/1206.htm)

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The Smoky Hill River Valley and the Historic Smoky Hill Trail in Western Kansas (Source: http://historum.com/american-history/19145-howard-raynesford-smoky-hill-trail-4.html)

KSU “Quick Analysis of the Numbers” of the 3/31/2015 USDA Prospective Plantings Report

Today on March 31, 2015 the USDA National Agricultural Statistics Service (NASS) released its 2015 Prospective Plantings Report and its March 1, 2015 Quarterly Stocks Report.  There were a number of market surprises in the Prospective Plantings report, including:

1) larger than expected 2015 U.S. corn plantings (89.199 million acres – up 468,000 acres from prereport expectations, but still down 1.398 mln ac. from last year),

2) smaller than anticipated 2015 U.S. soybean plantings (84.635 mln. ac. – down 1.284 mln ac from prereport expectations but still up 934 mln ac. from a year ago),

3) larger than expected 2015 U.S. other spring wheat plantings (12.969 mln ac. – down 365,000 acres from prereport expectations, and down 56,000 acres from last year),

4) smaller than anticipated 2015 U.S. cotton plantings (9.549 mln ac. – down 280,000 acres from prereport expectations, and down 1.488 mln acres from a year earlier),

5) smaller than anticipated 2015 U.S. grain sorghum plantings (7.900 mln ac. – down 229,000 acres from prereport expectations, but still up 762,000 acres from a year earlier), and

6) larger than expected 2015 U.S. barley plantings (3.528 mln ac. – up 331,000 acres from prereport expectations, and up 553,000 acres from last year).

Total 2015 U.S. cropland and harvested hay and tobacco acres of approximately 378.5 million acres is projected to be a) down 2.9 million acres from 2014 (381.3 mln ac.), b) down 1.987 mln ac. from 2013 (380.4 mln ac.), and c) up 935,000 acres from the drought ravage year of 2012 (377.5 mln ac.).  Those skeptical about the results of this report in regards to U.S. corn (too high?), soybean (too low), grain sorghum (too low?), and spring wheat (too low?) planted acres will scrutinize the state-by-state changes projected in this report.  The margin of error projected by the USDA in this report leaves ample room for changes that may yet occur in these numbers – due to planting conditions, changing planting decisions by farmers, etc.

Following are the tables from a “Quick Analysis of the Numbers” of the USDA 2015 Prospective Plantings report that is available on the KSU AgManager website (http://www.agmanager.info/) at the following web address: http://www.agmanager.info/marketing/outlook/newletters/default.asp

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The Great Kansas Outdoors (Source: http://www.kansashunting.com/)

KSU Weekly Grain Market Analysis: Looking ahead to USDA Planting Intention & Stocks reports on 3/31/2015

Grain market summary notes, charts and comments ahead of the KSU Agriculture Today Grain Outlook to played on Friday, March 27th will be placed up on  the Kansas State University www.AgManager.info website at the following web address: http://www.agmanager.info/news/Articles/KSRN_GrainOutlook_03-27-15.pdf

The recorded radio program will be aired at 10:03 a.m. central time, Friday, March 27th 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

Following are sections of the working notes prepared for the March 27th radio program:

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A sunset in Northwest Kansas (over a Center Pivot Irrigation System!) (Source: https://www.facebook.com/james.claassen.9/posts/10202471220247374)