Crop Market Update: April 29, 2014

U.S. producers have the planters up and running, but progress still remains behind schedule. U.S. producers currently have 19% of the U.S. crop currently planted compared to a 5-year average of 28%. Mississippi is also behind with 75% planted compared to an average of 92%. Mississippi producers have seen 51% of their corn emerged, behind the 5-year average of 80%. With wet weather across Mississippi as well as many other areas across the country, planting progress will likely begin the week slow but could pick up by week’s end. The slow planting combined with continued strong demand has kept the corn market bullish.

Soybean planting is slowly progressing in Mississippi with 24% of the crop planted this week. This compares to 14% last week and is behind the 5-year average of 38%, but producers are well ahead of last year’s pace. U.S. producers have 3% of the soybean crop planted, with much of that progress found in Southern States. Strong soybean exports along with extremely tight supplies have kept soybean markets bullish, despite expectations of a large harvest this fall.

Wheat prices have been rallying over the last week, but still haven’t quite surpassed their mid-March highs. The condition of the U.S. crop is a bit questionable, with only 33% of the crop rated good or excellent, down 1% from last week and the same as last year at this time. Much of that can be contributed to abnormally dry conditions in the Southern Plains. Currently, 18% of the U.S. wheat crop has headed out compared to a 5-year average of 26%. Mississippi’s wheat crop is maturing much slower than normal with 42% of the crop headed out compared to a 5-year average of 80%, but the crop is faring much better than the U.S. crop with 68% of Mississippi’s wheat rated good or excellent.

For more detail on crop futures and Mississippi local cash prices click here. Detailed information on crop progress can be found here.

Cattle Market Notes: Week Ending Apr 25, 2014

Cash Cattle:

Cash fed cattle prices finally began to level out just a bit. For the week, the accumulated weighted average price across the major feeding regions for steers was $146.68 live, down $0.40 compared to the previous Friday, and $236 for dressed, up $1.45. Cash trades in the Texas Panhandle were reported at $145. All other regions had light trade.

Feeder steers were called steady to $2 higher in Oklahoma City on Monday. Feeder heifers and all calves were steady in OKC. Feeder steers were $4 higher while heifers were $1 higher in Mississippi markets this week. Calves were steady to $10 higher.

[ … For Livestock Prices and Production data and trends CLICK HERE … ]

Futures:

Cattle futures were up this week, ending the day Friday $2 or more ahead of the previous week’s Thursday close. Improvement in wholesale boxed beef prices was the primary catalyst for the improved prices. Feeder calves were also higher, with fall 2014 contracts improving $3 or more, in spite of higher corn prices. The improved live cattle market and continued supply concerns helped propel prices. USDA, NASS released their April Cattle on Feed report after markets closed Friday. The report revealed fewer cattle placed than were expected and a smaller than expected overall fed cattle inventory, which should help markets Monday. For more detail on the report CLICK HERE.

Corn futures were higher with contracts over the next year ending the week $0.10 to $0.12 higher. Strong export sales early in the week pushed prices higher followed by a mostly steady end to the week.

Beef:

Wholesale boxed beef prices were moderately higher this week, putting a stop to a four week slide for Choice and a five week slide for Select. Choice boxes averaged $231.91, up $7.64. Select boxes were $220.41, up $6.35.

Note: all cattle and beef prices are quoted in dollars per hundredweight and corn prices are quoted in dollars per bushel, unless stated otherwise.

April Cattle on Feed Report Recap

The United States Department of Agriculture’s National Agricultural Statistics Service (USDA, NASS) released their monthly Cattle on Feed report Friday afternoon (Apr 25). The report revealed that 10.860 million head of cattle were in U.S. feedlots with a capacity of 1,000 head or larger on April 1, 2014. Placements into feedlots during the month of March totaled 1.795 million head while marketings totaled 1.660 million head.

[ … For detailed numbers and charts CLICK HERE … ]

Placements were expected to be larger once again in March, but tempered lower compared to previous month’s expectations (and realizations). The average of analysts’ expectations called for an increase of 1.6% from the March 2013 number and the range of expectations ran from a decrease of 4.7% to an increase of 4.3%. The reported placement number, 1.795 million head, was a decrease of 4.7% from March 2013 and a 3.0% decrease from the five-year average from 2009 to 2013. So, it appears that the January and February push which had placements well above expectations has led to a pull back in March.

Texas, being highly competitive, took the reigns back from Nebraska and led the nation in total placements (470,000 head) and now stands tied with Nebraska in total inventories (2.5 million head).

Cattle marketed in March totaled 1.660 million head, down 3.7% versus last year and down 11.3% compared to the average from 2009 to 2013. Pre-report expectations called for marketings to come in at a 3.5% drop, so the reported value was very much in-line with the average of expectations. Once again, this marks the lowest level of cattle marketed during March since the data began in 1996.

As a result of the lower placements than were expected and the lower marketings, total cattle on feed inventories were not much different than anticipated. The 10.860 million head were 0.6% lower than April 1, 2013 and 2.3% lower than the average from 2009 to 2013. Analyst had expected inventories to be 0.4% higher. Total nventories continue to climb throughout 2014 due to the high level of placements through the first two months. The April report provides some insight on cattle inventories by class. Steers on feed April 1, 2014 were 2.18% higher than last year and 4.22% higher than January 1, 2014. On the other hand, heifers on feed totaled 3.710 million head, 5.93% lower than last year and 0.54% lower than last quarter.

A break down on the numbers can be found at this link: http://goo.gl/1M4YXv

Cattle Market Notes: Week Ending April 17, 2014

Cash Cattle:

Cash fed cattle prices continue to decline. For this holiday shortened reporting week, the accumulated weighted average price across the major feeding regions for steers was $147.66 live, down $1.66 from the previous Friday, and $240.41, up $0.12. Cash trades were limited through early Thursday but most locations were being reported just below the regional average at $146 live and $237-$238 dressed.

All feeders and calves were steady in Oklahoma City early in the week.

[ … For Livestock Prices and Production data and trends CLICK HERE … ]

Futures:

Cattle futures were down $0.75 to $1.50 compared to last Friday’s close – depending on the specific contract – for live cattle futures and feeder futures ranged from $0.43 to $2.25 declines. It was a roller-coaster week with prices increasing Monday, falling Tuesday, higher again Wednesday, and then much lower Thursday, the final trading day of the week. Exports were reported much higher on Thursday but that did little to quiet the screams from the dismal cash and beef market which largely led the futures trade this week.

Corn futures were mostly steady versus last Friday’s close. Wednesday was the harshest with favorable weather expected across the Cornbelt giving the market a splash of bearish sentiment.

Beef:

Through mid-week wholesale beef prices were on a downward path up until Wednesday when both Choice and Select prices saw a mild increase. The four day average (April 11-16) was $222.81 and $213.03, respectively for Choice and Select.

Note: all cattle and beef prices are quoted in dollars per hundredweight and corn prices are quoted in dollars per bushel, unless stated otherwise.

Farm Bill Presentations, Support Tools, and Calculators

This page will provide links to presentations and various tools that we create. Please check back frequently as new tools will be added and updates to existing tools will be provided. If you have any questions or find any errors with any of these tools please feel free to contact us or leave a comment below.

Farm Bill Learning Session Presentations (December 2014):

All About the 2014 Farm Bill

Farm Bill Decision Aids (part 1)

Farm Bill Decision Aids (part 2)

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Base Reallocation Calculator v 1.0  [updated April 8, 2014]

:: Previous versions: N/A

Generic Base Distribution Calculator v 1.1 [updated April 14, 2014]

:: Previous versions:

  • v 1.0, April 8, 2014

Crop Market Update: April 15, 2014

The latest USDA crop progress report is the first of the year to report U.S. planting progress for corn. Corn planting is slightly behind normal with 3% of the U.S. crop currently planted compared to a 5-year average of 6%. Mississippi is also behind with 56% planted compared to an average of 77 percent. With wet weather in Mississippi and cold, wet conditions in the Corn Belt, it is likely that we will remain behind schedule this week. Corn exports are remaining strong, with just under 1.45 million metric tons inspected for export this week.

Soybean planting is slowly progressing in Mississippi with 6% of the crop planted this week. This compares to 4% last week and is behind the 5-year average of 15%. Soybeans have been strong since the release of last Wednesday’s supply and demand report. Old crop soybeans are in short supply, while demand remains strong. There is, however, a difference of more than $2.60/bu between the nearby futures contract and the harvest time November contract. The difference is being driven by what is expected to be a very large soybean crop this year that will provide relief to the tight supplies.

Mississippi’s winter wheat crop is beginning to head, with 2% of the crop headed out as of Sunday. This is significantly behind the 5-year average of 41% at this time of the year. Despite slow progress in the Mississippi wheat crop, 68% of the crop is in good or excellent condition, far better than the U.S. winter wheat crop, which is rated 34% good or excellent. While wheat prices have come down from their late-March highs, they have steadied over the last week or so. Concerns about the crop’s condition are helping to support prices, as is the cold weather across much of the country.

I love a good Pareto improvement story

But then again, who doesn’t? In order to help migratory birds, rice farmers are being paid to keep their fields flooded for longer than they otherwise would:

The program, called BirdReturns, starts with data from eBird, the pioneering citizen science project that asks birders to record sightings on a smartphone app and send the information to the Cornell Lab of Ornithologyin upstate New York.

By crunching data from the Central Valley, eBird can generate maps showing where virtually every species congregates in the remaining wetlands. Then, by overlaying those maps on aerial views of existing surface water, it can determine where the birds’ need for habitat is greatest.

The BirdReturns program, financed by the Nature Conservancy, then pays rice farmers in the birds’ flight path to keep their fields flooded with irrigation water from the Sacramento River as migrating flocks arrive. The prices are determined by reverse auction, in which farmers bid for leases and the lowest bidder wins.

Farmers aren’t required to participate, so they’ll only do so if they think they’ll be better off accepting the payment and not drying their fields. Since prices are determined by reverse auction, the Nature Conservancy pays relatively less for the service. And presumably they are paying farmers only because “they” (that is, the people whose interests the Nature Conservancy represents) think it’s worth it. But does this program really have much affect? They’re still collecting and analyzing the data, but there are some promising initial results:

The project’s first season ended last month, as birds headed north from newly flooded fields. Researchers said all of the birds whose numbers they hoped to improve were seen on “pop up” wetlands — a temporary steppingstone for the birds’ journey north. This happened when the field would have ordinarily been drained, an indication that the approach was working. More analysis will be done this month.

What about effects on the market for rice?

In this first year, 10,000 acres (out of 500,000 devoted to rice farming in the Central Valley) owned by 40 farmers were flooded for four, six or eight weeks, at an average of 200 to 250 acres each. (Many farmers did not participate because of California’s drought.)

So only about 2% of acres participated in the program. And that’s just in the Central Valley, California. And generally, farmers still have time to dry out the fields for planting, so the effect on the rice market is probably negligible:

Even for farmers who have enough water, the program can require some careful calibration. “If we put our water on late, the fields might not dry out” in time for planting, said Doug Thomas, who grows sushi rice for Rue & Forsman Ranch near here and who took part in the program this year.

But he added that the compensation was better than adequate and that he liked the private-sector nature of the initiative.

And I like the way the program is described by a Nature Conservancy representative:

Dr. Hallstein, of the Nature Conservancy, said that at first it was a difficult to get farmers to make the shift, but that it helped when they thought of shorebird protection as just another crop, like rice.

NYTimes.

Makes sense. Just think of helping migratory birds as one thing people are willing to pay farmers to do with their land. Producing rice is another. Agritourism might be another. Etc.

Cattle Market Notes: Week Ending Apr 11, 2014

Cash Cattle:

Fed cattle cash prices slid lower again this week. The five-area fed steer price came in Friday at $149.32 for live sales, down $2.11, while dressed steers were at $240.29, down $3.19 versus two weeks ago. Once again, state-level cash markets did not record enough trade by mid-Friday for a trend to be called.

Feeder and stocker steers and heifers in Oklahoma City were steady to $2 higher, feeder and stocker heifers were $2-$3 higher, and calves were steady. In Mississippi auction markets, feeder steers were $10 lower, feeder heifers were mixed, and all calves and stockers were mostly steady. Cull cows were $2 lower while bulls were $4-6 lower.

[ … For Livestock Prices and Production data and trends CLICK HERE … ]

Futures:

Cattle futures moved higher this week despite there being limited positive news bouncing around. First, boxed beef cannot seem to find it’s footing which has added the most significant pressure to cash and futures prices up until this week. Second, equity markets continue to decline, which typically signals weakness at the consumer level. Never the less, cattle futures were able to shake these and move higher largely due to support from limited supplies, exports that remain strong, and higher wholesale prices from competitors pork and chicken. A bit of good news did surface Friday with the monthly Reuters/University of Michigan Consumer Sentiment survey showing an improvement to 82.6 compared to 80.0 last month and an expected 81.0 reading.

Corn futures lost some of their steam. Wednesday’s supply and deamand report from USDA revealed few bushels expected to be carried over at the end of the current marketing year (ends in August). Dr. Williams has more detail on that report (CLICK HERE). Next month’s report will provide the first of USDA’s expectations for the current growing season.

Beef:

Wholesale beef continued to move lower throughout the week. Choice boxed beef averaged $225.50 for the week, down $6.63. Select averaged $214.99, down $7.09.

Note: all cattle and beef prices are quoted in dollars per hundredweight and corn prices are quoted in dollars per bushel, unless stated otherwise.

Agricultural Loans and Interest Rates 2014

The St. Louis branch of the Federal Reserve publishes quarterly reports on financial conditions pertaining to agriculture in the 8th federal reserve district which includes the northern half of Mississippi and the Delta Region.  Surveys from around the region show fixed interest rates for operating loans  averaging 5.39% on fixed loans and 5.01% on variable operating loans.  Intermediate-term loan interest rates averaged 5.65% and 5.21% for fixed and variable loans respectively. Farm real estate loans averaged 5.23% and 4.93% for fixed and variable loans.  The above interest rates were slightly higher than the same quarter a year ago where variable rates were between 4.48% for land and real estate and 4.77% for intermediate loans while fixed interest rates were as low as 4.87% for real estate loans and 5.45% for intermediate land and machinery loans.

 

Surveyed lenders expect demand for agricultural loans will be higher in 2014 than a year ago while also reporting ample quantities of loanable funds available to meet demand.  Minutes from the March meeting from the Federal Open Markets Committee were released on 9-APR-2010 where members indicated that a push to increase interest rates will not occur until at least 2015. The implication of these two conditions are that agricultural loan interest rates will remain low for all three types of loans through 2014.

April Supply and Demand Report Further Reduces U.S. Ending Stocks for Corn, Soybeans

Wednesday’s World Agricultural Supply and Demand Estimates (WASDE) reduced U.S. corn ending stocks to 1.331 billion bushels, lower than the expected 1.4 billion bushels. Domestic use for corn remained constant, but there was a 125 million bushel increase in corn exports. On the global corn market, ending stocks were reduced from 158.47 million metric tons to 158 million metric tons, which is in-line with market expectations. Global corn production was increased by more than 5 million metric tons, with Brazilian production increased by 2 million tons. Global consumption was also increased to offset the increase in production. The WASDE report in itself would be considered bullish for the corn market, but another report was released at the same time lowering Chinese imports by one million metric tons. As a result, July corn closed down 5 cents on the day. Among other news, Mississippi producers now have 41% of the corn crop planted compared to 46% a year ago and a 5-year average of 63%. The USDA is not yet reporting planting progress for the U.S. corn crop.

U.S. soybean stocks were reduced from 145 million bushels to 135 million bushels, lower than trade expectations of around 139 million bushels. With the reduction in April’s WASDE report, U.S. soybean stocks are now even tighter than they were a year ago when they were 141 million bushels. Exports were revised up by 50 million bushels while imports saw a 30 million bushel boost. A net increase of 20 million bushels traded on the global market is certainly no small amount considering such tight stocks. Globally, soybean ending stocks were reduced from 70.64 million metric tons to 69.42 million metric tons. Trade was expecting global ending stocks of 70.3 million bushels. Global production was reduced by about 600,000 metric tons, mainly from a one million metric ton decrease in Brazilian production. Soybean futures have reacted positively to the report, with July futures closing up 16 cents. Mississippi soybean producers are just starting to get soybeans planted. As of Sunday, April 6, Mississippi producers have 4% of the soybean crop planted, slightly behind the 5-year average of 7% for this time of year.

Both U.S. and global wheat stocks were increased in the April WASDE report. U.S. stocks were revised up from 558 million bushels in March to 583 million bushels in April, although the increase was in line with expectations. U.S. wheat imports were reduced, but were more than offset by reduced feed use. Globally, ending stocks were increased from 183.81 million metric tons in March to 186.68 million metric tons in April. The global stocks number came in much higher than traders expected, likely contributing to July wheat closing down 12 cents on the day. A large portion of the higher global wheat stocks comes from a decrease of 2 million metric tons in Chinese feed consumption. The cool spring has Mississippi’s wheat crop heading late this year. As of Sunday, April 6, only 1% of the state’s wheat crop has headed compared to a 5-year average of 21%. Although progress is behind normal, the wheat crop does look to be in good condition with 64% of the crop rated in Good or Excellent condition and another 30% rated Fair.