Market Matters Blog
Katie Micik DTN Markets Editor

Monday 09/15/14

Elevator Manager: Fall Harvest Could Be "Complete Disaster" Without Rail Cars
Uncertainty surrounding rail car deliveries to grain elevators in the upper Midwest could turn the fall harvest into a "disaster," according to one South Dakota elevator manager.[Read Full Blog Post]
Posted at 11:59AM CDT 09/15/14 by Mary Kennedy | Post a Comment
Comments (11)
Put some ground back to grass, raise some beef. Build pipeline for oil fields, this might help too. Having all the eggs in one basket is never a good thing. Right now railroad is the basket.
Posted by GWL 61 at 7:36AM CDT 09/16/14
If the current administration had approved the Keystone when it first was proposed we would not be in this situation. Overzealous environmentalists, and Warren Buffett; owner of Burlington Northern Santa Fe Railroad are using unscientific emotionalism and pure greed to exacerbate the problem.
Posted by Kent L Hoffman at 10:54AM CDT 09/17/14
Let Canada cross their own country if the pipeline is so safe! Its all to export oil, guessing you guys want to pay more for fuel? Anyhow let the markets dictate who uses the rails,,,, isn't that the conservative way? Maybe this country should build some railroads that are better then most 3rd world countries?
Posted by Jay Mcginnis at 12:28PM CDT 09/17/14
There was an opportunity to upgrade a line through SD, in the late nineties, only to be shot down by huge costs and environmental nuts. If we don't spend money on some sort of improvements to infrastructure, we will be a 3rd world country. On another note, if the current RFS mandate is increased, how the hell are the ethanol plants going to move more product with increased production. You belong in a 3rd world country with your ideologies.
Posted by GWL 61 at 1:04PM CDT 09/17/14
GWL -- I'm at a conference on global trade, and this morning's speaker, an econmist from an engineering firm, made a very strong case for why the U.S. lack of attention/desire to invest in infrastructure could lead us to be an "underdeveloped" nation (he didn't call it 3rd world, but close). His main point: Freight movement infrastructure is the difference between prosperity and stagnation. And he went through all the macroeconomic reasons why the American system is likely to stagnate. Another hot topic at this conference is the rail system. Farmers tell me BNSF's talking point -- that the backlog is only 3,000 cars -- is incredibly frustrating. If we still have old crop to ship and the elevators are already full of old crop, there isn't room in farmers' bins to hold the upcoming harvest. In the words of South Dakota farmer -- it's gonna get ugly.
Posted by KATIE MICIK at 1:23PM CDT 09/17/14
This country is too busy spending money on Mideast wars to take care of itself. The cost of these wars would have given us a much needed rail system both for freight and passenger service,,, instead we got ourselves ISIS and an endless war. Thank you president Bush and VP Chaney! Take care of our own problems is the ideology we need, payback from Iraq has been a big zero.
Posted by Jay Mcginnis at 3:41PM CDT 09/17/14
As always Jay, you ramble on into another subject. Man has been fighting on this planet since time. Those crazies over there want to kill you and I. We can sit back and do nothing. Watch the genocide and throat slashing from the comforts of your home, Jay. Never forget 9 / 11 , Pearl Harbor or the Nazi's. Someone wants what you got!
Posted by GWL 61 at 4:06PM CDT 09/17/14
With the backwards attitudes and opinions of some, the so-called developed world would still be lighting their yards with whale oil. That is, what is left of them.
Posted by Bonnie Dukowitz at 8:04PM CDT 09/17/14
Good old Jay Cliché, at it again! (I think she (Jay) is probably an avid Fox News watcher).
Posted by Brandon Butler at 1:31PM CDT 09/18/14
You are so right Bonnie,,, and since I have built a renewable energy infrastructure for myself the gasoline you use in your car, coal to electrify your home/farm and oil to heat your home look just like whale oil. Its time this country gets off Jurassic era energy sources and join the 21st century. We need to build a rail system instead of the massive amount spent on military to defend our oil interests in the Mideast. Take care of ourselves and lead by example. And for GWL, I know a number of Muslims, Egyptians, Iranians and none of them want to kill us, they are nice well educated people, your statement is a broad sweeping stereotype that is racist. If we didn't need oil the mideast issue would be mute.
Posted by Jay Mcginnis at 7:06AM CDT 09/19/14
Amazing Jay says things about stereotyping but that is exactly what he does with conservatives. And I invite Jay to hop in his electric car and come out there to Montana in January. I know he won't because with the standard weather, which changes 4 times a year here as I don't deny climate change, he will only get about 40 miles before he needs to recharge. Maybe Jay can enlighten us why we have to subsidize farmers when they want to buy a grain dryer. If it's his farm and his grain, shouldn't the farmer pay all the costs for processing it? After all, he gets all the income from that and can afford to pay his own bills. And did anyone notice that the railroads are putting $26 billion into infrastructure and enhancements to their workforce? And Jay, stop acting like you are living in a perfect world using no fossil fuel in any farm. Pretty sure we all know what your tractors and grain trucks run on, and the grain dryer you got the grant on to buy.
Posted by CRAIG MOORE at 8:20AM CDT 09/19/14

Thursday 09/04/14

A Full Notebook
Sometimes when I get on a roll with a project (or two), and I lose focus on my regular tasks, like keeping the blog fresh. Here are just a few interesting snippets from my overflowing notebook.[Read Full Blog Post]
Posted at 4:17PM CDT 09/04/14 by Katie Micik | 0 Comments | Post a Comment

Wednesday 08/27/14

Is Tuesday's Minneapolis Cash Trade a Sign of Things to Come?
Tuesday's U.S. spring wheat trade saw basis levels for high protein milling wheat gain as much as $1.75/bushel, a sign that protein is potentially poised to be a growing issue.[Read Full Blog Post]
Posted at 5:19PM CDT 08/27/14 by Cliff Jamieson | Post a Comment
Comments (1)
This is interesting with OK State's Kim Anderson saying; "Reports indicate that the average hard red winter (HRW) wheat protein in Texas, Oklahoma, and Kansas is about 14 percent. Millers report that 14 percent protein HRW wheat is an unprecedented problem. Reports indicate that the nearest acceptable protein wheat (in large quantities) is in northwest Nebraska. The protein premium is inverted as lower protein HRW wheat has higher demand than relatively high protein HRW wheat." It seems this price inversion of lower protein HRW wheat might keep HRW wheat out of the feedlot in the South - maintaining corn demand. Currently, it seems the premium for high protein wheat; not a discount for low protein, along with the sever discounted basis for corn should/might also keep wheat from returning to the feed channels in the North. Some diseased SRW will be fed but the level of inclusion in the ration is limited because of animal health issues. As it now looks, wheat will not replace corn (to a great degree) in feeding rations- as least in the US. Freeport, IL
Posted by Freeport IL at 8:35AM CDT 08/29/14

Monday 08/25/14

SD Shipper: "No Train, No Grain"
Rail car delivery delays continue in the Northern Plains and elevators are full, with corn and soybean harvest yet to begin.[Read Full Blog Post]
Posted at 10:43AM CDT 08/25/14 by Mary Kennedy | Post a Comment
Comments (4)
More farming, higher yields, lack of investing in infrastructure to move products = "train wreck"
Posted by GWL 61 at 12:59PM CDT 08/25/14
Good one, GWL. Political prevention of infrastructure. It may not seem a direct cause, but energy transporting via pipelines would solve much. But then, one can not use them if construction has not kept up to the need.
Posted by Bonnie Dukowitz at 5:28AM CDT 08/26/14
Our area the saying is NO RAIN NO GRAIN don't need TRAIN
Posted by Raymond Simpkins at 10:06AM CDT 08/26/14
Pastures full of pairs, feed yard full of fats, - 92 basis fall delivery corn, you have got to love this country! Rex Binger Tulare South Dakota
Posted by Unknown at 4:28PM CDT 08/27/14

Thursday 08/21/14

StatsCan Reports Canadian Production to fall Below Expectations
Statistics Canada estimates indicate that many crops will see production levels fall below the lower end of the range of pre-report estimates.[Read Full Blog Post]
Posted at 2:38PM CDT 08/21/14 by Cliff Jamieson | 0 Comments | Post a Comment

Monday 08/18/14

Rail Backlogs Continue
Editor's note: This report contains an update from Friday.[Read Full Blog Post]
Posted at 2:29PM CDT 08/18/14 by Mary Kennedy | Post a Comment
Comments (3)
The problem is Political. In Minnesota we have Sen. Franken and Sen. Klobuchar. In D.C., we have Pres. Obama and the elected powers of a handful of States. Pipeline and mining is at a standstill. The wealthy Enviro's have this group wrapped around their fingers for election cash. (many out of staters) After years of Amy, six years of the Joker and six years of a President, construction is still at a standstill. They then stand in front of a camera and tell us there trying to solve the problem. The base of the problem ( in Mn.) is who the 7 county metro has put in office, not the R.R.s. One can have all the meetings you want and the problem will not go away until many of the do-nothing elected are removed at the ballot box.
Posted by Bonnie Dukowitz at 5:37AM CDT 08/21/14
the whole infastructure in the upper midwest needs work when we have big crops............ i have had one of my elevators go a long time with out cars during winter wheat harvest
Posted by JeremeyFrost at 11:18AM CDT 08/21/14
The arab and daddy warbucks of BNSF RR are making megabucks off of the RR and Pipeline situation that exists on Great Plains of the USA & Canada. What, 2 more years of this "DO NOTHING" governance ?
Posted by james kuntz at 9:20AM CDT 08/26/14

Friday 08/08/14

Harvest Storage, Transport Worries
With a large corn and soybean harvest looming and an abundant wheat crop expected in the Northern Plains, farmers and elevators are nervous that the delay in rail car placements will continue and storage will fill up on the farm and at the elevator, forcing some to store grain on the ground.[Read Full Blog Post]
Posted at 2:17PM CDT 08/08/14 by Mary Kennedy | Post a Comment
Comments (1)
Mary, are grain prices oversold because of this uncertainty of delivery and supposed extra protection taken that you pointed out in this article?
Posted by Roger Cooper at 7:43PM CDT 08/10/14

Tuesday 08/05/14

Merchandising Makes Money Once Again
Second quarter financial results from two of the ABCDs of the grain industry show that merchandising profits are making a comeback.[Read Full Blog Post]
Posted at 9:54AM CDT 08/05/14 by Katie Micik | Post a Comment
Comments (3)
Questionable ethics of those counting huge crop that is not in bin. Huge amount of fresh water being pump in nebraska for no profit what a waste of a resource
Posted by andrew mohlman at 12:36PM CDT 08/05/14
Go back 10 or 20 years and look at corn exports and feed use. They are basically flat lines! In a really good year together they might get rid of say 7B bu.! Ethanol uses about 5B bu. annually (thank goodness)! Corn is going to get real cheap in places if it can't be moved or consumed if we end up with an extra 2-4B bu. carryout down the road a year or two from now! 300 bpa can't fix low prices nationwide under current consumption scenarios no matter how many seed companies tell you how much extra grain this world's population is going to need in the future! It's a train wreck coming without programs to limit production or additional ways to use-up the extra bushels! What say you, Katie?????
Posted by Roger Cooper at 8:01PM CDT 08/10/14
You make a very good point Roger. Corn certainly has an uphill battle in terms of demand. With China's pickiness about the MIR 162 (and likely the Duracade trait after harvest), strong export numbers will depend on demand from a lot of other countries. One thing that I've found interesting this year is the resurgence of Western Hemisphere demand. China's bid up the price of our sorghum crop, so Mexico imported more U.S. corn. The FTA with Colombia kicked in this year and they're in the running to be one of our top 3 buyers this year. That's still not enough, however, to chew through what China's left on the table + a likely 2 BB carryout. Maybe we're just going to have to wait for that cattle herd to recover? Let's hope the ethanol export economics stay a bright spot!
Posted by KATIE MICIK at 10:32AM CDT 08/11/14

Friday 08/01/14

Upper Mississippi River Closed Again
The heavy rain and flooding in the Upper Mississippi River this spring has created another problem for the river: shoaling.[Read Full Blog Post]
Posted at 1:25PM CDT 08/01/14 by Mary Kennedy | 0 Comments | Post a Comment

Friday 07/25/14

Dread Grows as Harvest Nears
Elevator operators are working on getting railcars that were scheduled as far back as February.[Read Full Blog Post]
Posted at 2:20PM CDT 07/25/14 by Mary Kennedy | 0 Comments | Post a Comment

Tuesday 07/22/14

Imaginary Numbers
DTN Market Editor Katie Micik offered me the opportunity to respond to her recent piece about USDA's soybean residual use category on the supply/demand report.[Read Full Blog Post]
Posted at 6:45AM CDT 07/22/14 by Darin Newsom | Post a Comment
Comments (13)
Gee, what a spoil-sport you are! How could specs have fun in the market without monthly reports to play with!
Posted by LeeFarms at 7:25AM CDT 07/22/14
Good morning. I agree. After all, that's what these reports were initially intended to do, right?
Posted by DARIN NEWSOM at 7:48AM CDT 07/22/14
The real question is if the stocks do not exist, yet they are assumed to have existed before, then what of the farmer who "supposedly" produced said soybean. Is he or she then but a variable with the reality of their production(or lack thereof)neither confirmed nor believed. In other words Is this real life? Stephen
Posted by Unknown at 3:27PM CDT 07/22/14
Follow up comment If I assume that I have made money on the bean. But I spend it on something(old car maybe). I get to the end of the year and the money doesn't exist. Does the IRS have a negative residual for income Concerned Stephen Ellis
Posted by Unknown at 3:35PM CDT 07/22/14
Thought provoking questions Stephen. There is no such thing as a reality of production to be confirmed or believed when it comes to soybeans. That was one of the key points I took from Katie's article. So no, it is not real life. Is it tradeable information? Yes, and that is was keeps the system in place. As for your second comment, what I've heard from customers following the sell-off in grains is that the IRS better have an accounting for a negative residual income. Just kidding. As I said in the piece, it would be nice if I could do my books the way USDA is allowed. As always, thank you for your your comments.
Posted by DARIN NEWSOM at 4:09PM CDT 07/22/14
I do know some numbers of reality,95 degrees and no rain since the 25th 0f June.
Posted by Raymond Simpkins at 4:41PM CDT 07/22/14
Thank you for your comment Raymond. I agree, that is reality.
Posted by DARIN NEWSOM at 6:52PM CDT 07/22/14
no rain here since june 27th only irrigation making grain what a waste not likley to get money back or the water so under valued it is sad. traders knowlege is not there
Posted by andrew mohlman at 8:40AM CDT 07/23/14
are you crazy? how dare you question the usda and nass. they may put a hit on you darin there are some decent crops in se nd but right across the road from them will be a field that is 50% gone. you can then add in the fact that even the decent looking fields are 2 weeks behind, uneven and short. that doesn't get us close to a normal crop. we have decent moisture but the next 2 weeks call for below normal temps and below normal precip. not really a forecast to add bushels.
Posted by harlan deike at 9:48AM CDT 07/23/14
Only in the good 'ol USA could taxes be spent on such a useful service as "voodoo statistics"! We are so passive!
Posted by Roger Cooper at 12:12PM CDT 07/23/14
I have been threatend by NASS agents to fill out their surveys.We had one show up at the house at 5:30 in the morning and told me I had to fill it out now.Needless to say she has never been back. Then they sent another guy who was a pain in the rear, Now when we get them in the mail they go to the round file cabinet.Our information is only used against farmers anyway no matter what.
Posted by Raymond Simpkins at 7:53AM CDT 07/24/14
They say the Gulf Water is cold and that there will be no hurricanes in the Gulf. That is our late moisture. Our crops are hurting now, where are we going to get the moisture to make the crop that everyone is talking about?
Posted by Unknown at 8:11PM CDT 07/24/14
I'm with you, Ray!
Posted by Roger Cooper at 9:50AM CDT 07/27/14

Friday 07/18/14

Grain Shippers Worry Upcoming Harvest Will Put Railroads Further Behind
Deliveries of past-due rail cars are still lagging in parts of the U.S. and Canada, and grain shippers worry the upcoming harvest will put railroads even further behind schedule.[Read Full Blog Post]
Posted at 12:54PM CDT 07/18/14 by Mary Kennedy | 0 Comments | Post a Comment

Wednesday 07/16/14

Winning at the Waiting Game? Not in Ag Commodities
A recent Wall Street Journal article outlined how investors can win by waiting in commodities. It's a viable strategy in some markets, but risky in most ag markets now.[Read Full Blog Post]
Posted at 12:59PM CDT 07/16/14 by Katie Micik | Post a Comment
Comments (1)
nobody knows what the future will bring mother nature is in control in ag no matter what humans wish
Posted by andrew mohlman at 8:39AM CDT 07/17/14

Friday 07/11/14

Eight Locks and Dams Still Closed; St. Louis Rises Above Flood Stage
Three locks in Minneapolis have reopened, but eight locks farther downstream are still closed to barge traffic.[Read Full Blog Post]
Posted at 4:51PM CDT 07/11/14 by Mary Kennedy | 0 Comments | Post a Comment

Thursday 07/03/14

Informa Pegs Corn Yield at 165 BPA, Soybeans at 44.5 BPA
Private analytical firm Informa Economics said U.S. farmers have the potential to produce a 13.7 billion bushel corn crop and a 3.7 bb soybean crop this year.[Read Full Blog Post]
Posted at 11:09AM CDT 07/03/14 by Katie Micik | Post a Comment
Comments (8)
Informa and Hultman don't want to see anything that might be bullish. Like too much rain makes poor stands, poor population, disease , vomitoxin , low test weight and poor quality in corn and wheat. Last winter took its toll on winter wheat. Persistent rains have raised the levels of vom 20 percent in southern areas in wheat. Corn and soybeans were planted one month late and El Nino weather pattern points to colder than normal for the next 90 days and to a frost in September.
Posted by ALVIN FERGUSON FERGUSON at 9:10AM CDT 07/04/14
We can only hope for a early frost in central Mn, crops are a disaster, thousands of acres not planted, every low area gone from lakes in the fields, the USDA markets are down thanks to the corrupt reports from that United States Dictatorship of Agriculture. How times change when in 2012 this area made up for numerous states during the drought according to the USDA, now somehow this area does not count in their lies and reports. There was another comment made by another DTN subscriber saying high school kids are doing the numbers, I wish they were, as they would be more honest than the highly trained scam artists that now fudge false and dishonest reports, market changing "estimates" and surprises. What a joke the CBOT has become.
Posted by DAVID/KEVIN GRUENHAGEN at 8:18PM CDT 07/06/14
how would traders make money if they did not manipulate the market. Never say they were wrong always right they all run to the same know truth.hold it back from will be too late when truth told.china needs cheaper grains? traders threat too americas security.wasting are resources always plenty not real. importing beans? would hate to pay a farmer when he is right that is messed up.the under pricing needs to stop.addicted to stealing from ranchers or farmers sad state.
Posted by andrew mohlman at 8:46AM CDT 07/07/14
I love today's Bloomberg quote noting that an "avalanche" of grain will be coming to harvest this fall. I think that the avalanche may occur slightly before harvest as producers ship out the last inventory of the 2013 crop, probably beginning in August. I believe that there is still a lot of 2013 crop stored. Due to the old crop inventory, and the early planted 2014 crop, it may be that harvest lows will be put in early, and markets may rise throughout the fall and into early winter.
Posted by James Zeeb at 12:45PM CDT 07/07/14
looks real good from manson iowa to alma Kansas. would have to have lot of bad weather to hurt it
Posted by Matt & Cindy Bauer at 7:28AM CDT 07/08/14
I like the word POTENTIAL they all use.Any seed company will tell you their seed has the POTENTIAL to produce record yields when it is still in the bag.Well it has to go along way with all elements being near perfect to produce record yields.I don't know how Informa or anyone else can know what the crops are like without driving coast to coast and looking.I have seen some very poor crops in northeast Ohio this week.Small beans and yellow uneven corn.There are some very nice crops too always are,but USDA needs to figure in all the unplanted acres also.On a return trip from Texas this weekend alot of crops under water along the Mississippi and corn was no bigger in Ill. than here in Mi.
Posted by Raymond Simpkins at 12:00PM CDT 07/08/14
just wanted to let Informa know our POTENTIAL record yields were fading fast.With no rain for almost a month and cold temps, crops have come to a stand still.
Posted by Raymond Simpkins at 6:50AM CDT 07/16/14
shh raymond it is always a record would like it cheap on farmers backs
Posted by andrew mohlman at 8:39AM CDT 07/18/14
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