Market Matters Blog
Katie Micik DTN Markets Editor

Monday 04/14/14

Regulators Are People, Too
The change of guard at the CFTC -- three of five commission seats are vacant -- provides an opportunity for the relationship between ag and the Commission to improve.[Read Full Blog Post]
Posted at 4:46PM CDT 04/14/14 by Katie Micik | 0 Comments | Post a Comment
 

Thursday 04/10/14

Observations of a Weary Traveler
I've spent the last week and a half living out of my suitcase and filling up my notebook. Here are just a few of the things I've learned.[Read Full Blog Post]
Posted at 2:35PM CDT 04/10/14 by Katie Micik | Post a Comment
Comments (1)
I'd sure do what you do for about 10 days. You see and feel hands on things we hear about and don't realize the temperatures, winds, "pollen", smells etc. Do people say hello, are they friendly or they just living their own little world. Let me know and I'll use some of those frequent flyer miles for you.
Posted by STEVEN SWANHORST at 2:34PM CDT 04/12/14
 

Friday 04/04/14

Baseball Season Opens, But River, Head of Lakes Grain Season Still on Break
Rail car availability is improving slowly -- depending upon what part of the continent you are in. Northern lakes continue to host ice too thick for ships to break.[Read Full Blog Post]
Posted at 1:47PM CDT 04/04/14 by Mary Kennedy | 0 Comments | Post a Comment
 

Thursday 03/27/14

Overbooked China Diverts Shipments to the U.S.
It appears that overbooked Chinese soybean importers have diverted shipments to the United States, split between deliveries to the East Coast and the Gulf of Mexico, several sources told DTN.[Read Full Blog Post]
Posted at 4:20PM CDT 03/27/14 by Katie Micik | 0 Comments | Post a Comment
 

Tuesday 03/25/14

Parts of Ag Confidence Index Show Correlation to Corn Prices
DTN now has four years of data from the DTN/The Progressive Farmer Agriculture Confidence Index, and senior analyst Darin Newsom did a little extra analysis on whether or not the survey's results show a correlation with corn prices.[Read Full Blog Post]
Posted at 11:54AM CDT 03/25/14 by Katie Micik | Post a Comment
Comments (1)
Katie & Darin, Even as far out as North Dakota, Corn prices & the Confidence Index of Agriculture are strongly correlated. We never used to consider Corn a consistent agronomic Upper Great Plains top income performer. With all of the positives in todays Varieties, Renewable Fuels Standards Corn production & confident are directly linked. Were far from the I'-State's but even out here w/ 90-day maturity corn hybrids & premium corn values ;;; big expectations with corn drove great enterprise investment and expansion. Now it both price and confidence are greatly moderated.
Posted by Dale Reimers at 9:59PM CDT 03/25/14
 

Monday 03/24/14

Ag Confidence Index Foreshadows Things to Come
Some trends are bold and hard to ignore. Others are more subtle, more like foreshadow than forecast.[Read Full Blog Post]
Posted at 1:07PM CDT 03/24/14 by Katie Micik | Post a Comment
Comments (1)
Katie, Your story is correct on all accounts. Larger landholders are apt to feel more immediate pain from the slimming of margins. And Equipment is wonderfully upgraded by all farms at this time. No need to spend further on Equipment for several years. Land will be very selectively purchased from now on under these low-margin propositions. Balance Sheets are strong and if a small parcel with quality fits a grower it will still sell very strong. But selectivity will dominate our grower land purchases more than it did in the $7.25 corn years. Controlling costs is a dominant concern this year.
Posted by Dale Reimers at 9:46PM CDT 03/25/14
 

Friday 03/21/14

Rail Service Slow to Recover
Things are looking up for grain movement over water, but movement by rail continues to look overburdened.[Read Full Blog Post]
Posted at 3:44PM CDT 03/21/14 by Mary Kennedy | 0 Comments | Post a Comment
 

Wednesday 03/19/14

CME Shifts to Variable Daily Limits
CME Group's new plan for variable price limits will allow higher limits when the market is high and lower limits when prices are low. It will replace the fixed daily price limits of 40 cents in the corn market and 70 cents in the soybean market.[Read Full Blog Post]
Posted at 7:59AM CDT 03/19/14 by Katie Micik | 0 Comments | Post a Comment
 

Monday 03/17/14

Intuitive, with the Potential for Confusion
CME Group's new variable daily price limit mechanism replaces its "ad-hoc" fixed method with a fluid tool. It's intuitive that the limit should be higher when prices are higher and vice versa, but the new mechanism could introduce a little more confusion.[Read Full Blog Post]
Posted at 11:57AM CDT 03/17/14 by Katie Micik | Post a Comment
Comments (3)
Sounds like a hood plan although I'm with Mr. Hofmeyer I don't think it will make a lot of difference. The one good thing as for me when My neighbors ask what is the limit for corn I can say if CME would stop changing it I could tell you. It will be easier for me not to sound so dumb. Ha Ha !! I enjoy your articles Katie.
Posted by WARREN HARDY at 7:17AM CDT 03/18/14
How does 42 cents round to 45 cents? (see Newsome quote). This system seems fair to me. Keeping the daily limit at a level percent of price makes lots of sense. The displays that show current futures prices need to have the daily limit incorporated into the display, maybe just behind the commodity title.
Posted by Jim Williams at 2:42PM CDT 03/18/14
Hi Jim -- You are correct, in Newsom's simplified analysis, it should probably be 40 cents instead of 45. However, when I computed the 45-day averages, they were far from round numbers. So it's possible the 7% figure could be something like $.42617, which could be rounded up to 45.
Posted by KATIE MICIK at 2:57PM CDT 03/18/14
 

Tuesday 03/11/14

Mom, the Mini-Wheats!
CME Group is launching a Kansas City hard red winter mini-sized future contract, a product that will let producers and merchandisers hedge smaller quantities of wheat.[Read Full Blog Post]
Posted at 4:06PM CDT 03/11/14 by Katie Micik | Post a Comment
Comments (2)
How about Dad, where's the Pork Chops.
Posted by Dick Overby at 8:30PM CDT 03/11/14
Smart move it will let people be more aggressive.
Posted by Derek Newsom at 3:30PM CDT 03/12/14
 

Friday 03/07/14

Crimea River: Rumblings of War in the Grain Markets
Where events in Ukraine go from there is anyone's guess, and the uncertainty is adding to nervousness to markets. As far as grain markets are concerned, the conflict has come at a good time, if there is such a thing.[Read Full Blog Post]
Posted at 8:59AM CST 03/07/14 by Todd Hultman | 0 Comments | Post a Comment
 

Wednesday 03/05/14

One Cancellation Down, How Many More to Come?
Cancellations are expected. They just seem to be a little late to the party this year, generating questions about how much of the U.S. crop China will actually buy.[Read Full Blog Post]
Posted at 11:57AM CST 03/05/14 by Katie Micik | Post a Comment
Comments (5)
How can china just cancel a shipment? If I buy grain for future delivery I have to take it or at leased pay the difference in price.
Posted by FRANK FULWIDER at 7:13AM CST 03/06/14
That's a really good question Frank, and unfortunately there's not a very good answer. Here's what I've gathered from conversations with traders who work with China, academics and few Chinese traders I've met. One of the first things I'm always told is that there's some kind of an "out" clause in the contract, and China most likely pays a penalty fee. Sometimes, there's a clause that allows them to shift into a contract with a different origin. It shows up here as a cancellation, but for the grain company, it's still a sale. Also, one of the reasons why Chinese companies seem to cancel more than other countries is that they're not allowed to hedge on CBOT. They have the Dalian Exchange, but it's not nearly as liquid or true to global prices and doesn't quite work for them. The lack of hedging ability means makes them more willing to cancel a contract and pay a penalty fee if the market price goes down -- they still end up ahead. I wish I had a better answer for you, but this is about all the information I've been able to gather, and no one will go on the record either.
Posted by KATIE MICIK at 9:10AM CST 03/06/14
As a answer to your questions of how much of the US soybean crop will the Chinese buy, from the the way the markets are acting it looks like to me; the answer is All the Rest of it !
Posted by JONATHAN HOOK at 5:36AM CST 03/07/14
Hi Katie - Frank . Puede suceder que el exportador 'ABC" reemplace una venta de poroto a China con embarque en el Golfo por otra con embarque en Brazil / Argentina con una 'prima de descuento"en el precio que compensa la multa por anular la compra a USA saludos
Posted by Unknown at 9:25AM CDT 03/10/14
Thank you unknown commenter. My Spanish is rusty, but with the help of Google translate, here's what I think you're saying: It may be that the 'ABC' exporters of beans replace a sale to China from the Gulf with a shipment from Brazil/Argentina with a "premium discount" on the price that compensates for the canceled the purchase from the USA.
Posted by KATIE MICIK at 4:17PM CDT 03/11/14
 

Monday 03/03/14

Can Crop Insurance Guarantees Sway Acreage?
Now that crop insurance prices are set -- national average of $4.62 on corn and $11.36 on soybeans -- the question becomes whether or not the corn guarantee is high enough to keep acres away from soybeans.[Read Full Blog Post]
Posted at 10:58AM CST 03/03/14 by Katie Micik | Post a Comment
Comments (3)
Katie,my acres were set back in the fall when I planted wheat as I will double crop with soybeans.Double crop grain sorghum I have ruled out.Soybeans look to be the best money. I will have about 20% more bean acres. I try to spread my work load so I can't shift to many acres. I enjoy your articles.
Posted by WARREN HARDY at 6:34AM CST 03/04/14
I think weather is going to impact plantings more the insurance.Here we are first week of March and we have 3 ft. of snow in the fields in places.It is cold all the way to Texas, and won't they be thinking of planting soon? We are going to go from snow to mud because there is not any frost in the ground,Witch is not a bad thing I just don't know when we will be able to topdress wheat or get on the fields. So it could get late for corn in some places.
Posted by Raymond Simpkins at 7:03AM CST 03/04/14
4.70 corn is much better than 11.50 beans for me, will stay with more corn if weather cooperates
Posted by Tom Keller at 7:14PM CST 03/04/14
 

Wednesday 02/26/14

PED Virus Could Trim Corn Consumption
There's no doubt PED virus is front and center for pork producers, but should corn growers be concerned?[Read Full Blog Post]
Posted at 4:11PM CST 02/26/14 by Katie Micik | Post a Comment
Comments (1)
Purdue in their presentation are projecting a 3.7% drop in the number of head going to market. They also show a 0.9% increase in pork production. The higher production comes from higher slaughter weights. They estimate the futures market is expecting a 3.1% decline in pork supplies. Hogs are less efficient users of feed as they become heavier. So from Purdueâ?™s own projections they should expect corn use to increase. The economics will drive any additional increase in slaughter weights. Should available floor space be used for heavier hogs, the lower feed efficiency of heavier hog will consume more feed than if production; in number of head, had not dropped. Freeport, IL
Posted by Freeport IL at 1:01AM CST 02/28/14
 

Friday 02/21/14

Barge, Rail Logistics Still Plagued By Snow, Ice
Winter weather continues to hamper grain transportation.[Read Full Blog Post]
Posted at 10:58AM CST 02/21/14 by Mary Kennedy | 0 Comments | Post a Comment
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Recent Blog Posts
  • Regulators Are People, Too
  • Observations of a Weary Traveler
  • Baseball Season Opens, But River, Head of Lakes Grain Season Still on Break
  • Overbooked China Diverts Shipments to the U.S.
  • Parts of Ag Confidence Index Show Correlation to Corn Prices
  • Ag Confidence Index Foreshadows Things to Come
  • Rail Service Slow to Recover
  • CME Shifts to Variable Daily Limits
  • Intuitive, with the Potential for Confusion
  • Mom, the Mini-Wheats!
  • Crimea River: Rumblings of War in the Grain Markets
  • One Cancellation Down, How Many More to Come?
  • Can Crop Insurance Guarantees Sway Acreage?
  • PED Virus Could Trim Corn Consumption
  • Barge, Rail Logistics Still Plagued By Snow, Ice
  • Prepare for a Data, Demographic Deluge
  • Let the Acreage Debate Begin
  • Mother Nature Still Affecting River, Rail Logistics
  • Logistics Still a Mess on Rivers, U.S. and Canadian Rails
  • Freight Rates Easing