Market Matters Blog
Katie Micik DTN Markets Editor

Monday 09/15/14

Elevator Manager: Fall Harvest Could Be "Complete Disaster" Without Rail Cars

OMAHA (DTN) -- 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.

Empty railroad tracks not an uncommon sight for many grain elevators in the upper Midwest. (DTN photo by Mary Kennedy)

In a letter written by Tim Luken, manager of Oahe Grain in Onida, S.D., and presented at the Surface Transportation Board's recent rail hearing, Luken stated, "I have sold very little small grain into the market due to not knowing when I will be receiving cars to ship out in a timely manner. The farmers are full, the grain elevators are full and this fall harvest will be a complete disaster."

Luken sent a copy of the letter to DTN. In it, he talked about how late the Canadian Pacific is and has been, and the frustrations and money lost by both producers and elevators. "Rail issues started last year in September/October with the Canadian Pacific, about the time oil trains were being shipped from North Dakota off the Bakken oil fields. Cars we ordered were not fulfilled, and it caused elevators from shipping grain that needed to be delivered on contract. I am still shipping contracted spring wheat, winter wheat and corn that was contracted months ago. As of Sept. 5, I am 257 cars behind, and the contract date I am working on is the second week in June."

Luken added, "This year South Dakota will probably see the biggest grain production the state has ever seen. I have traveled all around the state and have not seen one grain deficit area anywhere. Even west of the Missouri River, crops look outstanding. This part of the state is not known for high production. This year will be an exception. With this being said, we should see near-record grain volumes handled no matter where you are in the state. Instead, it will probably be the lowest amount of grain handle that elevators will have due to the rail problems we have today."

Oahe Grain, located on the CP served RRCPE railroad in Onida, S.D., handles 9 million to 15 million bushels of grain each year. Luken said in his letter, "I can see this year of being a disaster with less bushels handled due to the low volume of rail cars delivered to our facility. This will also affect our bottom line of profitability; all due to poor rail service."

CANADA STILL LOOKING FOR PAST-DUE CP CARS

Doug Tallon, chairman of the board of directors of Great Western Railway, told DTN in an email that he is starting to get CP cars that he ordered in March and April. Tallon farms in southwest Saskatchewan and is on the board of directors of Great Western Rail, a short-line rail that is serviced by CP and interchanges with CP in Assiniboia, Saskatchewan.

"I found it quite interesting that the CP delegate at the STB hearing in Fargo tried to justify their record, saying they are moving more than the long-term averages," said Tallon. "This is the same argument they have been using with us. We are starting to receive cars as I suspect with harvest taking place, that the grain companies are emptied out and the grain isn't coming in fast enough to order more cars. The grain terminals are caught up."

Tallon said that they have approximately 1,400 outstanding orders from the old crop with another 700 new-crop orders and the CP is not keen on acknowledging the old orders as shippers in the U.S. have also reported. "Even though we are only a month and a half into the new-crop year, our biggest shipper on the line is telling customers that due to the poor rail service they may already be at capacity for the 2014-15 year," said Tallon. "The customers we have nurtured to come to our short line for product are becoming more frustrated by the day. The lack of rail service has had a very detrimental effect on our business relationships as well as our bottom line."

Tallon said that shipments to the U.S. have been the hardest to meet and the inability to ship grain in a timely manner is having a negative affect on the cash flow situation for the area farmers.

BNSF CATCHING UP ON PAST DUE CARS

John Miller, BNSF's vice president in charge of agricultural shipments, said in his weekly podcast that heavy rains last week in Missouri, Kansas and Nebraska caused delays to traffic due to soft tracks. In his weekly podcast on Sept. 11, Miller said that while most of the tracks have reopened, there is still a washout at Craig, Mo., that BNSF crews are working on repairing.

Miller said that in the past four weeks, the BNSF had "met or exceeded" the BNSF expected shuttle turns of 2.5 per month. He reported that overall, shuttle TPM was at 2.9 to the PNW and 2.9 TPM to the Gulf.

Miller said that, "Clearly one of our goals as we move through harvest is more predictability and consistent turns on freight. The Pacific Northwest is the largest draw on our system for AG volume during fall. This season, the route to PNW will have added and expanded sidings and a new double track.

Miller also reported that system wide, there are 1,879 past-due orders with North Dakota owed 864 and Montana owed 470. To see the complete service update to the STB, here is the link: http://goo.gl/…

As of Sept. 14, the CP had not filed a service update for last week.

STB Considers Additional Steps to Facilitate Recovery of Rail System.

STB Chairman Dan Elliott filed a letter to the STB on Sept. 10, outlining the ongoing rail issues facing all entities that rely on railroads for their livelihood. In the letter, he said, "Although it has long been board policy to favor private sector resolutions when possible, further regulatory action may be warranted for expediting the overall recovery or alleviating particularly intractable service failures. I also believe that any such action should not benefit one industry at the expense of others, or spur unintended negative consequences. While I cannot speak for my fellow board Members, I anticipate further action in light of the recent Sept. 4 hearing."

"At that hearing, both BNSF and CP acknowledged that their respective recoveries had not proceeded as well as they hoped, but expressed cautious optimism that service improvements would occur in the fall, in particular for agricultural shippers. Overall, the hearing helped to crystallize the board's understanding of the current challenges." Here is a link to Elliot's filing to the STB: http://goo.gl/…

Mary Kennedy can be reached at mary.kennedy@dtn.com

Follow Mary Kennedy on Twitter @MaryCKenn

(BAS/AG)

Posted at 11:59AM CDT 09/15/14 by Mary Kennedy
Comments (1)
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
 

Thursday 09/04/14

A Full Notebook

Sometimes when I get on a roll with a project (or two), I lose focus on my regular tasks, like keeping the blog fresh. I'm lucky some of my colleagues have stepped up to help fill this space over the past few weeks.

My whole focus lately has been on putting together a feature for The Progressive Farmer's mid-November special issue on marketing and writing the article on DTN/The Progressive Farmer's Agriculture Confidence Index, which will be published on Monday morning. My notebook is beyond full, and here are a just a few snippets of what I've been asking farmers about lately.

One Iowa farmer I spoke with said he anticipates expanding his soybean acres from 30% of his land this year to 60% of his land next year. Beans require fewer inputs, and he figures he'll only lose $15 per acre on beans compared to $75 per acre on corn.

This is one of the major trends I've picked up in my interviews over the past couple of weeks. Farmers are seriously thinking about how to cut back on their costs without sacrificing yields. Most, all actually, said they'll postpone new equipment purchases. Some have mentioned switching more acres to beans. One Missouri farmer, who had cattle and hogs in his younger days but was forced to sell out, said he'd switch some row crop land back to hay production.

Shortly after that conversation, this moved across the Dow Jones Newswires: "The much-improved financial picture for U.S. livestock producers could prompt some farmers to switch to using land for raising animals rather than growing crops, says Purdue economist Chris Hurt. Grain prices have fallen sharply from their 2012 highs and livestock supplies have tightened, helping growers of pigs, cattle and chickens boost profit margins. "If the years from 2007 to 2013 could be described as the 'Grain Era' in which crop-sector incomes had an extraordinary run, the coming period may be described as the 'Animal Era' when producers of animal products have strong returns," Hurt writes. Moving from cash crops to livestock "will be most predominant" in the central and western Great Plains, where land for crop use is "marginal," he predicts.

Farmers in Oklahoma and other parts of the southwest have told DTN reporters they'll be paying much more attention to the livestock portions of their business. And the Missouri farmer who left the livestock industry, isn't alone. DTN Livestock Analyst John Harrington said it's hard for people forced out of the business, and often into retirement, to return. But a growing industry needs more suppliers. During the grain market's boom years, producers turned a lot of grass and pasture ground into fields of corn. Some of that marginal crop ground may be shifted back into pasture during the 'Animal Era.'

Stay tuned. There's plenty more in my notebook to share.

(AG/CZ)

Posted at 4:17PM CDT 09/04/14 by Katie Micik
 

Wednesday 08/27/14

Is Tuesday's Minneapolis Cash Trade a Sign of Things to Come?

All indications point to a large global wheat crop this year. The most recent USDA report forecast global production at a record 716.09 million metric tonnes, up almost 11 mmt or 1.5% from last year's crop. Sounds bearish? Perhaps not so.

This line chart indicates the trend in Minneapolis milling quality spring wheat basis levels, as determined by the midpoint of the reported daily range of basis levels traded, for 12% to 15% protein levels. Cash basis narrowed suddenly on Tuesday, indicating a heightened concern over the prospects for this year's crop quality. (DTN graphic by Nick Scalise)

Crop quality around the world has the potential to become a larger and larger issue. For example:

-- Recent reports have France importing wheat to bring up their quality in order to meet export commitments, with a large percentage of French production failing to meet milling quality. Algeria, one of their top customers, has since stated that they will refuse to accept production sourced from multiple originations.

-- While Ukraine's total harvest is suggested to fall 13% due to the conflict with Russia and fighting in the country, from 63 mmt to 55 mmt, 35% of the crop is estimated to reach feed quality, up from 25% to 30% last year.

Weather remains the key for the North American harvest. As of the most recent weekly USDA Crop Progress report, 27% of the spring wheat crop had been harvested, down from the five-year average of 49%. The State of Washington is well ahead of average, Idaho and Montana are on track with the five-year average, while Minnesota and the Dakotas are well behind average as of August 24. Minnesota had taken off 22% of the crop versus the average of 66%. South Dakota had harvested 57% as compared to the average of 87% and North Dakota had harvested 10% as compared to the 43% five-year average. In addition to the delays, the overall Good to excellent crop rating was reduced by two percentage points to 66% from the previous week. The Prairie harvest remains in early stages.

Tuesday's cash trade in Minneapolis showed just how jittery this market is, with early reports of low protein seen in harvested new crop. As seen on the right of the attached chart, Tuesday's trade in milling quality spring wheat on the Minneapolis Grain Exchange for delivery of 12% to 15% protein Chicago/beyond saw basis levels reported raging from unchanged (12% protein) to $1.75/bu higher(15% protein).

The high end of the reported trading range for 12% protein was up 5 cents to 95 cents over the September. The high end of the reported trading range for 13% protein was up 65 cents to $2.25/bu over the September future. The high end of the reported trading range for 14% protein was up $1.05/bu to $2.90/bu over the September while the upper end of the trading range for 15% was up $1.75/bu to $5/bu over the September future. The September closed at $6.12 3/4 cents on Tuesday.

This is a remarkable one-day move and could signal what's to come.

Cliff Jamieson can be reached at cliff.jamieson@dtn.com

Follow Cliff Jamieson on Twitter @CliffJamieson

(CZ/SK)

Posted at 5:19PM CDT 08/27/14 by Cliff Jamieson
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"

OMAHA (DTN) -- Oahe Grain in Onida, S.D., has been full since Aug. 14 and had been expecting a train from the CP, but it was a "no show."

The driveway at Oahe Grain, in Onida, S.D., is empty with no railcars to load out full bins. (Photo by Tim Luken)

"If and when the train does get here," manager Tim Luken told DTN via email on Aug. 20, "we will load 25 cars, 85,000 bushels of spring wheat. That will be enough to run us for 5 hours and then fill again.

"There are farmers that have their trucks full and waiting for us to get room again," said Luken. "Some producers have run out of room and now the only room left is at elevators. The RCP&E Railroad is doing the best they can with the resources the CP is giving them. This isn't going away anytime soon either."

Every single Midwest Cooperatives elevator is full, Jeremy Frost, grain merchandising manager told DTN via email on Aug. 22. Midwest Cooperatives has locations at Pierre, Onida, Blunt, Philip, Kadoka, Draper and Highmore, all in South Dakota, and is associated with CHS Inc. The elevator is served largely by the Rapid City, Pierre & Eastern Railroad based at Rapid City, S.D., which was sold to Genesee & Wyoming Inc. on May 31, by Canadian Pacific Railroad, but relies on CP to drop rail cars for shippers on the line.

"We're just starting spring wheat and piling it on the ground in Pierre and are looking for other locations to pile it," Frost said. This is on top of the winter wheat, approximately 150,000 bushels, that was piled in Pierre in late July and still sits there.

Frost said some of his farmers are taking wheat south to Nebraska. "Some are going further north with their wheat and others are putting it in bags and piles," he said. "Typically, they'd make a 50-mile round-trip to sell grain and now it's easily 150 miles or more."

Keith Brandt, manager of Plains, Grains and Agronomy located on the CP in Enderlin, N.D., told DTN, "Loading a June 2 shuttle. Have mid-April 25 car and single orders not filled. It's going to be a long fall."

Farther north, Jeff Kittell, manager at Souris River Cooperative on the CP in Lansford, N.D., said nothing has changed for him since he talked to DTN one week ago. "Still waiting on March orders, but we are 'supposed to' see a train this week for weekend loading." He is still concerned the CP may not fill the older orders.

NORTH DAKOTA SENATOR ASKS STB TO HOLD HEARING

North Dakota Senator George B. Sinner, Democratic-Nonpartisan League Party nominee for North Dakota's sole Congressional seat in the U.S. House of Representatives, told DTN via email that he encouraged the Surface Transportation Board to return to North Dakota for a public hearing over the rail backlog. Sinner said the STB "has accepted my invitation to return to North Dakota and reassess the very serious rail backlog situation that has affected farmers across our state."

Sinner told DTN, "This hearing is an opportunity for the STB to hear from shippers and see that the progress made by the rail companies still isn't enough to alleviate the pressure and loss of revenue being placed on farmers today. Harvest is here, and our farmers can't wait any longer for action. We look forward to having the STB in North Dakota and discussing real, common sense solutions." Sinner has been a staunch advocate for grain shippers in North Dakota facing the ongoing transportation issues caused by the railroad backlogs. Here is the public notice by the STB announcing the hearing on Sept. 4: http://goo.gl/…

The BNSF said in their weekly service announcement on their website that good progress in decreasing the number of past-due car orders for agriculture customers continued. "U.S. past-due orders are now at 2,609, at an average of 12.9 days late. Likewise, coal customers experienced higher average daily coal deliveries for the week at 744,000 tons, up 30,000 tons delivered compared to the prior week, and nearly 22% higher than our baseline week in early February."

The BNSF said that for the week ending Aug. 19, network fluidity statistics were somewhat mixed. "Despite these mixed results, we continue to make good progress in key areas. Terminal dwell was 28.9 hours for the week ending Aug. 15, which is better by 2%, or a half-hour, compared to the prior week.

"Train velocity was flat compared to the prior week at 14.6 miles per hour. Trains holding for power increased 10% week over week, driven by a 49% increase in the South Region caused by weather-related issues in the southwest and previously planned maintenance and capital projects. Nonetheless, compared to our baseline week in early February, trains holding remains down 31.2%."

Here is the link for the complete BNSF service report on Aug. 22 to STB: http://goo.gl/…

USDA CALLS POOR RAIL SERVICE A "CRISIS"

In a letter on Aug. 22, USDA filed reply comments to the Surface Transportation Board on the board's current rail rate challenge procedures and also reported the losses suffered by poor rail service since January 2014.

USDA pointed to a North Dakota State University study that estimated a $67 million loss in North Dakota farm level revenue for crops that were sold from January through April. In addition, the study estimated another potential $95 million loss in farm revenue if crop basis levels did not improve. USDA said another study estimated delays in railroad shipping have cost Minnesota corn, soybean, and wheat farmers nearly $100 million and have cut deeply into the value of grain still in storage.

"The losses occurred because of unexpected increases in transportation costs, such as skyrocketing costs of grain cars on the secondary railcar market that peaked at $6,000 per grain car, and other transportation-related costs associated with the rail service crisis," USDA stated. "Early on, some of these additional costs were likely borne by the exporter through reduced margins, but as the situation progressed, were more likely reflected in the prices paid to producers for their crops." The entire USDA filing to the STB can be seen here: http://goo.gl/…

Mary Kennedy can be reached at mary.kennedy@dtn.com

Follow Mary Kennedy on Twitter @MaryCKenn

(AG/CZ)

Posted at 10:43AM CDT 08/25/14 by Mary Kennedy
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

Editor's Note: DTN Canadian Grains Analyst Cliff Jamieson, who usually blogs for DTN's Canada Grains Pro site, wrote today on Statistics Canada releasing its first report of expected 2014 production levels for Canadian crops. The report was based on results from a survey of 12,850 producers during the July 23 to Aug. 4 period. We're sharing the comments with U.S. customers interested in how Canada's harvest might affect world grain and oilseed stocks.


Statistics Canada released its first report of expected 2014 production levels for Canadian crops today, basing results on a survey of 12,850 producers during the July 23 to Aug. 4 period.

It was a given that this year's production would be well off the record production levels set for many crops in 2013. The major challenge faced in estimating 2014 production centers around the excessive rains seen in eastern Saskatchewan and western Manitoba: determining the impact to the planted crop as well as estimating the total acres left unseeded. As stated in a recent Canada Markets blog, this report has a tendency to be conservative in nature and tends to underestimate production for almost all crops when compared to the final production estimates released in December.

At first glance, what jumps out from this report are estimated production levels which are below even the lowest of trade estimates. Durum wheat production, the all-wheat production, oats, barley and canola production forecasts for 2014 were all reported to be lower than the lowest of the pre-report estimates reported by Commodity News Service.

Canada's all-wheat production is estimated at 27.704 million metric tons, just below the range of estimates from 27.8 mmt to 29.9 mmt. This would reflect a decrease of 26% from last year's record 37.530 mmt crop. The reduction comes as a result of a reduction of all-wheat acres planted of 7.6% while the overall all-wheat yield is pegged at 44 bushels per acre, down 17.6% from last year.

Spring wheat yields in Canada are pegged at an average of 43.6 bpa, down from 53 bpa last year, but comparable to the five-year average of 43.8 bpa. The recent CWB crop tour pegged the average Prairie crop at 43.1 bpa, while the yield estimate for spring wheat derived from Statistics Canada's experimental Crop Condition Assessment Program (CCAP), using satellite data, came in at 40.6 bpa for Western Canada. Year-over-year drops in spring wheat yield ranged from 16.4% in Alberta to 20.6% in Manitoba. On average over the past five years, the final spring wheat production estimate has been 8.5% higher than the July estimate, suggesting the tendency for a conservative release in this report.

Durum production for 2014/15 was pegged at 4.953 mmt, well below the 6.5 mmt produced last year and also just below the range of trade estimates of 5 to 6 mmt. Overall durum acres are estimated to be 3.8% below year-ago levels and just slightly below the June estimate. The overall durum yield is estimated to be 39 bpa, down 19.4% from last year's 48.4 bpa, although there is a wide range of expectations for this year's durum crop. Just weeks ago the CWB crop tour reported an average yield of 48.1 bpa, just slightly below last year, while the recent CCAP release suggested an average yield of 36.6 bpa. Lower-than-expected production on the Prairies will see durum buyers take note, as durum prices have firmed in recent weeks largely based on production challenges in Europe.

At 13.908 mmt, the canola crop came in well below expectations of a 14.75 mmt to 15 mmt crop as indicated by a Commodity New Service poll of trade analysts. Other forecasts had suggested this year's crop would reach 14.5 mmt. The current forecast would see production equal 2012 levels and a full 4 mmt or 22.6% below last year's production level. Seeded acres on the Prairies are estimated to be just slightly higher than last year at 20 million acres while the determining factor in this year's crop is an expected 20% drop in yield to 32 bpa. Estimated yield reductions are somewhat consistent across the Prairies, with an approximated 21% drop in Saskatchewan and Manitoba and 18.8% drop in Alberta.

StatsCan's estimated canola yield is slightly lower than the 34 bpa reported from the CWB crop tour, while the recent CCAP estimate was 34.5 bpa. As discussed in a recent Canada markets blog, the final December report saw canola production increased by 9.8% from the July estimate on average over the past five years, which suggests that the trend is towards a conservative July estimate. Despite the much tighter supplies this crop year, canola's potential is tempered by what's expected to be a record U.S. soybean crop, as well as a record global oilseed crop. Futures spreads in today's trade continue to reflect a bearish approach from the commercial trade, while uncertainty over the 2013/14 carryout will continue to stir debate.

Production of oats and barley are estimated below the range of trade estimates. Oat production is estimated to be 2.639 mmt, below the 2.76 mmt to 3.1 mmt range of pre-report estimates. This reflects a sharp decline of 1.25 mmt or 32% from last year's final production estimate and would be the smallest crop since 2010. Canadian oat ending stocks will end very tight in 2014/15, while the December oat contract has broken above trendline resistance today, resistance which has been in place since the last week of February as seen on the weekly chart. Yesterday's Canada Markets blog discussed bullish signals seen in the oat market leading up to today's report.

Barley production for 2014 was estimated at 7.164 mmt, well below the range of estimates between 7.5 mmt to 8.2 mmt. This marks a 30% reduction in production from the 10.2 mmt crop produced in 2013. Barley ending stocks are set to move to very tight levels in the upcoming year which will leave barley prices high compared to corn prices, barring a weather event which could result in larger-than-expected feed wheat supplies on the Prairies.

Soybean production in Canada came in slightly lower than expected, with expectations that production could come in above 6 mmt for the first time in history. Today's estimate suggests a 5.9 mmt crop, which would still reflect a record production and 13.5% above 2013 levels. The largest volume increase is seen in Ontario, where production is expected to increase 487,000 mt to 3.565 mmt, while the largest percentage increase is seen in Saskatchewan where estimated production is suggested to increase 54% to 182,300 mt, only the second year that records have been kept for this province.

Corn production in Canada is estimated to fall by 19.5% to 11.4 mmt from last year's 14.2 mmt, which would make it the smallest crop since 2011. Production in both Ontario and Manitoba have fallen back from year-ago levels, while DTN correspondent and Ontario producer Phillip Shaw states that corn yield estimates for that province remain too high, which could mean further revisions in time.

A 30.8% increase in seeded acres to 3.130 million acres combined with an expected 15.7% reduction in estimated yield is reported to see the lentil crop increase slightly in size to 1.930 mmt. This remains just below the record 2 mmt production achieved in 2010. This level of production is slightly lower than a previous estimate by AAFC and would continue to suggest tight ending stocks and a stocks/use ratio below 10% for the current crop year.

A 19.5% increase in seeded acres of dry peas to 3.925 mmt along with a reduction in yield of 18% to an estimated 35.7 bpa is suggested to lead to an overall 7.6% reduction in production to 3.558 mmt. This would see the 2014 crop be the third largest in history, after last year's record production of 3.849 mmt and the 3.565 mmt produced in 2008. This would also act to tighten the balance sheet for 2014/15 and likely result in a stocks/use ratio below 10%.

One crop whose production did come in above expectations was flax, with an estimated 908,000 mt production level just above the 800,000 to 900,000 mt trade estimate. This would represent a 27.5% increase from last year and the largest crop since 2009.

Cliff Jamieson can be reached at cliff.jamieson@dtn.com

Follow Cliff Jamieson on Twitter @CliffJamieson

(ES)

Posted at 2:38PM CDT 08/21/14 by Cliff Jamieson
 

Monday 08/18/14

Rail Backlogs Continue

OMAHA (DTN) -- As winter wheat harvest winds down (95% as of Aug. 10 according to USDA's latest Crop Progress report) and spring wheat harvest gears up (6% complete), grain transport problems that have existed for months are still with us. That frustrates elevator operators wanting to free up space for not only wheat but corn and beans in the fall.

An oil train in northern Minnesota with one buffer car at the end. (DTN photo by Mary Kennedy)

Tim Luken, manager of Oahe Grain on the RCP&E shortline in Onida, S.D., has had many sleepless nights over the CP railroad not performing, as he still waits for at least 170 past-due cars in the midst of new-crop harvest.

On Aug. 13, Luken said to DTN in an email, "I have still not sold any grain due to the fact [of] not knowing when we may get cars. I am hoping I can get my old contracts due to [the] grain buyer by the end of September. This will catch me up. We are cash only on all wheat. We took in 185,000 bushels yesterday and only have room for 70,000 today. Will have to wait for trains next week again."

The problem is exacerbated by what Luken said looks to be a big spring winter wheat harvest. "This is just the tip of the iceberg. Hearing of a lot of farmers trying to put up more bins," said Luken. "Think about this: We get through both small grain and row crops, but there is no way the farmer and elevators could ever get cleaned out before next harvest the way the CP is getting cars to us. This is very devastating."

In a letter to the Surface Transportation Board (STB) on Aug. 11, USDA Undersecretary of Marketing and Regulatory Programs Edward Avalos said, "With remaining grain in storage due to the backlog, grain elevators in some locations, such as South Dakota and Minnesota, could run out of storage capacity during the upcoming harvest, requiring grain to be stored on the ground and running the risk of spoiling. The projected size of the upcoming harvest creates a high potential for loss in the affected States."

USDA is concerned the pace of CP's weekly progress on reducing the backlog of late grain cars is insufficient to meet its obligation of fulfilling the 29,650 open requests for service before October. "We estimate CP would need to move about 4,725 cars per week to clear the grain backlog by Oct. 3," Avalos pointed out. "This includes about 3,300 past-due cars and about 1,425 new requests per week, the weekly average of new requests in July. However, CP's weekly reports to the board show it has only been moving an average of 1,969 cars per week in July, which would leave a significant amount of the grain backlog remaining in October." The entire letter to the STB can be seen here: http://goo.gl/…

The CEO of the Canadian Pacific Railroad does not think his railroad is that far behind, according to Agweek. Hunter Harrison told North Dakota leaders at a roundtable meeting on Aug. 11 in Minot, N.D., that his railroad might be "effectively caught up, in its ag orders, despite reports to the contrary." Harrison also said his firm only handles 20% to 25% of North Dakota's grain in a normal year, so the problem lies more with the Burlington Northern Santa Fe railroad.

Here is the link to the CP service update to the STB on Aug. 15: http://goo.gl/…

Another CP shipper, Jeff Kittell, manager of Souris River Cooperative in Lansford, would likely not agree with Harrison that the CP is "effectively caught up." Kittell told DTN in an email that, "Past-due cars for Souris River are still as late as March 17 on singles and March 24th on a unit train." He indicated some shippers feel CP will get to a point where they roll out the new car order system and then just wipe old orders off the books. If that were to actually happen, some elevators waiting on CP cars will effectively get further behind, as they sit full with old-crop grain and new-crop grain begins to beat down their doors.

BNSF Closer to Filling Past Due Orders

"The BNSF is getting very close to moving all old-crop related cars", said John Miller, vice president of BNSF agriculture products in his weekly podcast of Aug. 15. "With this kind of progress, we are confident we will be down to 2,000 past dues by mid-September, if not sooner."

According to the website service update on Aug. 15, the BNSF "... has made good progress on decreasing the number of past due car orders for agriculture customers with U.S. past dues down 21% compared to the prior week and now stand at 2,671 past due orders. For coal customers, our average daily coal deliveries increased to 734,600 tons, which is up from 716,600 tons delivered the prior week, or 2.5% better."

Montana's past-due car orders were at 618 cars vs. 729 the prior week, Minnesota is owed 221 cars vs. 331 cars the prior week and South Dakota is owed 132 cars vs. 103 cars the prior week. North Dakota is owed 1,325 cars vs. 1,774 cars the week prior and has been waiting 18.2 days vs. 19.8 days the prior week. Here is the link to the BNSF service update to the STB on Aug. 15: http://goo.gl/…

Paul Lautenschlager, manager of Beach Coop Grain, Beach, N.D., is staring at an elevator full of old crop as the new-crop wheat harvest waits for space and he waits for past-due railcars to empty the bins out. He told DTN he is hoping to get a train he ordered for June 10 very soon. He is frustrated and said if the car situation doesn't get any better, he is "looking for a disaster at harvest. Wish me luck!"

The BNSF website stated, "While there will continue to be some week-to-week fluctuations in the performance of our operation due to normal, periodic weather events and planned maintenance and expansion work, we remain focused on executing our plan to increase capacity and strengthen BNSF's service performance."

OIL TRAINS CROWDING TRACKS

In an email to DTN, Bob Zelenka, executive director of the Minnesota Grain and Feed Association, said the rail backup is causing financial problems for grain elevators and logistical troubles for grain handlers and traders. "We still have grain elevators that are several weeks behind on receiving their rail cars, while at the same time, every day, an oil train goes by the elevator, which seems to add insult to injury," he said. "The extra oil shipments have aggravated congestion in St. Paul and Chicago rail yards, further delaying whatever grain trains are available to serve farmers.

Repair work may further delay trains in those areas. In his August 15 podcast, Miller said tie and replacement gangs will be working in the Minneapolis to Chicago corridor, but "engineering and transportation teams will co-ordinate efforts to keep traffic moving through fall." This work is expected to continue until November.

"The way things stand right now, it's going to be nip and tuck as to whether railroads will be able to move last year's crop prior to new crops coming out of the field," Zelenka said.

Mary Kennedy can be reached at mary.kennedy@dtn.com

Follow Mary Kennedy on Twitter @MaryCKenn

(AG/CZ)

Posted at 2:29PM CDT 08/18/14 by Mary Kennedy
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

OMAHA (DTN) -- 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. There are reports of winter wheat piles already seen in South Dakota and Montana with winter wheat harvest only 55% complete in South Dakota and 40% complete in Montana as of Aug. 3, according to USDA's weekly Crop Progress Report.

Winter wheat pile at elevator in Pierre, S.D., on Aug. 1, 2014. (Courtesy photo)

BNSF Group Vice President for Agriculture John Miller, speaking at a meeting of the North Dakota Agricultural Rail Business Council in Mandan, N.D., on July 31, sought to reassure nervous customers. He told attendees that the BNSF will "perform better than a year ago at harvest."

In their weekly newsletter the Red River Farm Network, Grand Forks, N.D., reported that Dan Wogsland, executive director of the North Dakota Grain Growers Association, said: "Farmers are seeing the impact of the poor rail service reflected in the cash grain bids at their local elevator. Our basis levels are way out of whack. From what I understand, the grain industry is taking some extra protection in the basis to make sure they're covered in the case of defaults on deliveries. That all goes back to the farmer that is expecting, in good faith, that his product gets moved."

David Fiebiger, manager at Finley Farmers Elevators, Finley, N.D., and president of the North Dakota Grain Dealers Association doesn't agree. "The larger issue is obviously the increased freight cost that is making basis 'out of whack,'" Fiebiger told DTN this week in an email. "What Mr. Wogsland described is elevators being prudent and trying to mitigate the additional risks that might be in the marketplace, all due to rail transportation delays. To state that the elevator manager is 'taking extra protection' implies that the elevator manager is padding his basis, a position I find to be a bit naive."

In his weekly podcast of July 31, John Miller, vice president of BNSF agriculture products, said: "there has been a 26% improvement week over week" in car placements. On average, 4,066 cars were owed versus 5,182 the prior week and days late were at 19.9 versus 22.2 the prior week. North Dakota is owed 2,399 cars versus 3,230 cars owed the week prior and has been waiting 23.1 days versus 24.1 days the prior week. Montana is owed 660 cars versus 977 cars the prior week, Minnesota is owed 468 cars versus cars the prior week and South Dakota is owed 105 cars versus 240 cars owed the prior week. Here is the link to the BNSF August 1st service report to the STB: http://goo.gl/…

US CP RAIL SHIPPERS HAVE LITTLE HOPE CARS WILL ARRIVE FOR HARVEST

In their weekly service update to the STB, the Canadian Pacific Railway reported that as of July 31, there are 22,457 requests for grain cars in North Dakota versus 23,818 the prior week and on average, cars are 11.71 weeks late. There are 7,193 requests in Minnesota versus 8,246 the prior week and on average, cars are 12.43 weeks late. Here is the link to CP Aug. 1 service report to the STB: http://goo.gl/…

The USDA weekly Grain Transportation Report said that, "CP fulfilled only 1,186 grain car orders in the past week for North Dakota, 210 for Minnesota, and 391 for the RCP&E in South Dakota. Excluding any new requests that may occur as the 2014 harvest begins, it would take CP another 17 weeks at this rate, or until late-November, to eliminate its backlog of grain cars. By this time, the 2014 harvest will be nearly complete, and there would probably not be enough storage space for both crops, especially in South Dakota."

Tim Luken is manager of Oahe Grain, Onida, S.D., an elevator that is located on the RCP&E railroad which relies on the CP for cars. Luken said, "I am behind 407 cars with HRW harvest not finished and spring wheat harvest is starting. I will only have space for 150,000 to 200,000 bushels of spring wheat because most of my elevator is filled with the winter wheat harvest."

Jeff Kittell, manager at Souris River Cooperative Lansford, N.D., served by the CP said that: "We are waiting on five trains and 243 singles, all with want dates June 23 and prior. We have already posted no open market winter wheat deliveries this fall and are just taking in contract grain; no cash or DP." He agrees with other shippers that Canada's Bill C-30 will definitely have a negative impact on CP U.S. car placements because there are no penalties in the U.S. similar to ones in Canada for not providing timely service.

BILL C-30, THE FAIR RAIL FOR GRAIN FARMERS ACT

Canadian producers and commodity groups welcomed the Aug. 1 announcement from the federal government regarding the regulations to accompany Bill C-30, The Fair Rail for Grain Farmers Act. DTN Canadian Grain Analyst Cliff Jamieson said: "The Order in Council which had set minimum weekly volumes for each of Canada's two railroads since March was extended until November 29, while was also increased to 536,250 mt for each railroad on a weekly basis, up from the previous 500,000 mt, with financial penalties in place for failure to meet this volume. In addition, the bill requires an increased, more timely flow of data from the railways, increases competition between railways with increased inter-switching distances, as well as sets a framework for arbitrating service-level disputes between shippers and the railways as well as contract issues between producers and grain handlers."

"As can be expected," said Jamieson, "the railways are not happy." Claude Mongeau, CEO of CN Rail, Canada's largest railway, said, "As there are no structural problems to fix, there is no need for such burdensome and ill-advised regulatory intervention," and "the government's approach can only stifle supply chain collaboration and may ultimately undermine investment in the rail sector." Hunter Harrison, CEO of CN Rail, stated the legislation is "disappointing" and "is very unfortunate and clearly demonstrates that despite the facts, this government has not listened." Jamieson added, "Meanwhile, industry waits for feedback from a number of level-of-service complaints against the railways which have been filed with the Canadian Transportation Agency."

Jamieson said that regardless of the Canada regulations, the Canadian railroads are not hurting. "CN's latest financial results show record volumes moved in the three months ending June 30, revenues increased 17% (revenues for grain and fertilizer increased 35%) and net income increased 18% from year-ago levels to $847 million. Their share price is currently at $71.90 C$, up 19.3% this year. CP Rail also achieved a record quarter, with revenues up 12% and net income up 48% on an earnings per share basis. CP trades at $205.03, up 28.5% this calendar year."

Mary Kennedy can be reached at mary.kennedy@dtn.com

Follow Mary Kennedy on Twitter @MaryCKenn

(CZ/SK)

Posted at 2:17PM CDT 08/08/14 by Mary Kennedy
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

The merchandising and agribusiness divisions of two of the nation's largest grain trading companies are once again making a profit.

Archer Daniels Midland Company and Bunge have both struggled with transportation issues and sourcing grain from reluctant farmers this year, but it appears the tides have turned, based on their second quarter financial reports. What's more, both companies see the strong performance in the second half of the year.

A few key points show up in each company's press releases. Favorable ethanol production margins played a big role. The renewal of export business was another. Lower crop prices and anticipation of a large harvest on its way also played a role in the company's rosy outlooks.

Last week, Bunge announced its Agribusiness sector nearly doubled its earnings before interest and taxes over the same quarter last year. It expects to meet or exceed its targets for the year.

"We had a strong performance in the second quarter with all segments reporting higher year-over-year results. Strong global oilseed processing margins, driven by big crops and growing demand, led to significantly better results in agribusiness," Bunge CEO Soren Schroder said in the company's press release. "Improved operational and commercial performance and the addition of our new wheat mills in Mexico contributed to a record quarter in food & ingredients. The results demonstrate the potential of this segment and the value of managing integrated oilseed and grain chains."

On Tuesday, ADM announced that its earnings from merchandising and handling increased to $101 million from $14 million during the same period last year. Transportation profits increased to $27 million from $3 million. Meanwhile, it's corn processing division profits increased $69 million, and it's oilseeds division profits increased $18 million.

"In the second quarter, the ADM team continued to execute very well and delivered strong results. We capitalized on robust ethanol demand, a recovery of U.S. grain export volumes and continuing strong demand for oilseeds products," ADM Chairman and CEO Patricia Woertz said in a press release. "Today, the crops in North America and Europe are developing nicely, so we are preparing for what could be very large harvests."

Bunge's Chief Financial Officer Drew Burke went into a little more detail. "In agribusiness, demand for agricultural commodities should remain strong due to the combination of lower crop prices and robust livestock economics. Crops in North America and Europe are developing well, supporting good forward soybean and softseed processing margins in these regions. After a strong period of farmer selling in South America, we expect a slower pace in the second half of the year. While this would reduce utilization in the region, it should provide additional export opportunities for the U.S. and Europe. It will also skew results more towards the fourth quarter."

The ADM press release can be found here: http://bit.ly/…

The Bunge press release can be found here: http://bit.ly/…

(AG/SK)

Posted at 9:54AM CDT 08/05/14 by Katie Micik
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. Shoaling is the result of sediment settling in the river, mainly in channels near locks, causing the water levels there to become shallow. This can create sandbars that would be dangerous for barges to navigate and they could become stuck. Barges need at least a 9-foot draft to navigate safely and when shoaling occurs, the Army Corps of Engineers needs to dredge the area, closing all traffic on either side of the area.

When shoaling occurs, the Army Corps of Engineers needs to dredge the area, closing all traffic on either side of the area. (Photo courtesy of USACE St. Paul District)

The USACE St. Paul District reported significant shoaling between Wabasha, Minn., and Alma, Wis. A portion of Pool 4, (a pool is the area between navigation dams) located between Wabasha and Alma, was closed to commercial navigation July 19. An area of Pool 6 near Winona closed on July 23 after a vessel ran aground near Blacksmith Slough by mile marker 719.2. The Corps reported that 17 vessels along with 120 loaded barges and 32 empty containers have been stalled by the dredging.

The Corps said they are still dredging the 9-foot navigation channel between Wabasha, Minn., and Alma, Wis., in Pool 4 and estimates completing a 200-foot wide pilot channel Aug. 10. The channel in Pool 4 was first closed July 19 at River Mile 754 due to shallow conditions. The channel also remains closed to commercial navigation in Pool 6, near Winona, Minn., and the Corps estimates completing a 200-foot wide pilot channel Aug. 8. The Corps reported that several locations have current depths less than 9 feet extending across the entire navigation channel.

The Corps said that they have two government dredging operations, the Dredge Goetz and a mechanical dredging crew, along with two contract mechanical dredging operations currently working to remove the dredged material from the channel. They also have two channel survey boats operating throughout the St. Paul District to monitor other areas within the river as well as supporting dredging operations. The Corps stated that, "The survey results will be evaluated and prioritized based on dredging needs."

With barges unable to move up or down river from the Minneapolis-St. Paul district to Winona, cash basis levels for corn and soybeans have been negatively affected all week. Terminals above the closure cannot receive any more empties to load out grain and some have very little bin space to hold grain. One elevator in the St. Paul District sent out this notice to their customers on July 29: "Due to (lack of) barge availability in the cities, we will be shut down for corn receipts until further notice."

Mary Kennedy can be reached at mary.kennedy@dtn.com

Follow Mary Kennedy on Twitter @MaryCKenn

(AG)

Posted at 1:25PM CDT 08/01/14 by Mary Kennedy
 

Friday 07/25/14

Dread Grows as Harvest Nears

OMAHA (DTN) -- As harvest nears, elevator operators in the Northern Plains still waiting on railroad cars ordered months ago are experiencing feelings of dread, especially smaller operators or those handling specialty crops.

BNSF cars wait to be loaded at a Edgeley, N.D., grain elevator July 14. (DTN photo by Elaine Shein)

Reports are that larger-shuttle loaders and those handling mainstream grains are receiving cars before single-car loaders.

In its weekly update to the Surface Transportation Board on July 18, the Canadian Pacific railroad said they have a total of 23,761 open car order requests in North Dakota averaging 10.72 weeks late. The report from the prior week showed 24,280 open requests with an average of 10.14 weeks old.

The problem with the CP reporting system is it does not separate older orders from more recent orders, making it unclear how much, if any, progress is being made on the past due cars.

However, if you talk to most CP shippers in the U.S., especially those who don't load 100-car trains, they will quickly fill you in as to how late the railroad really is.

Jeff Kittell, manager of Souris River Cooperative of Lansford, N.D., an elevator serviced by CP, said he is "still waiting on a March 6 spring wheat unit train." He added, "Single cars ordered for February 3 are supposed come this week."

Keith Brandt, manager for Plains Grain & Agronomy in Enderlin, N.D., said, "We loaded a May 5 shuttle yesterday but have orders for smaller units dating back to April 8," said Keith Brandt, manager for Plains Grain & Agronomy in Enderlin, N.D. "Railroads are really favoring the large unit sizes. That makes it tough for specialty crops and there is not a big market for shuttles of spring wheat."

Robert Johnson, CP senior vice president of operations, told the STB, "We remain committed to working with our customers and the STB staff to move as much grain as possible and to find solutions to problems that may arise." Here is the link to the full July 18 report by the CP to the STB: http://goo.gl/…

But Kittell, like many other shippers, has little confidence in the CP's ability to catch up before harvest. He said his locations need at least three to four trains to clean out before harvest and that it was probably "not going to happen as winter wheat harvest is about three weeks away."

Brandt added, "We are plugged on wheat and wheat harvest is two weeks away. There is a lot of unpriced corn that wants to move before soybean harvest and that is going to muddle things up for soybean harvest."

BNSF MAKING PROGRESS

The BNSF railroad seems to be making progress, as cars owed and days late decreased from last week. The BNSF also announced on July 22 that it "will offer more shuttles and COTs for this year's fall harvest than in 2013. Specifically, we will run at least as many COTs as we did in 2013 during the fall months."

In their July 15 weekly service update, BNSF said, "For the week ending July 15, overall on-time performance decreased a little over 8 percentage points compared to the prior week but is still 27 percentage points better than our baseline week in early February. System velocity, which is defined as miles per day (MPD), increased to 177 MPD for the week ending July 15 compared to 173.2 the prior week. For the week ending July 15, our trains holding average is down 9 percentage points when compared to the previous week and down more than 32% since the week ending Feb. 7. Fewer trains holding means more trains can begin their trips without delay due to congestion or a critical resource."

In his weekly podcast of July 18, John Miller, vice president of BNSF agriculture products said on average, 6,154 cars were owed vs. 6,720 the prior week and days late were at 23.7 vs. 27.1 the prior week. North Dakota is still owed the most cars with 3,831 cars owed vs. 4,243 the week prior and has been waiting 26.5 days vs. 29 days the prior week. Montana is owed 1,098 versus 1,212 cars the prior week, Minnesota is owed 425 cars vs. 613 cars the prior week and South Dakota's total rose to 489 cars owed vs. 229 cars the prior week. Here is the link to the BNSF July 18 service report: http://goo.gl/…

RAIL, BARGE FREIGHT COSTS SOAR

Secondary freight costs continue to rise for U.S. BNSF shippers with the last trade reported at $3,500 per car and this is over and above the tariff rate paid to move the car. Cars in the primary railcar market (COT auction) have been trading at historic highs since late May for guaranteed railcar placement for grain shipments in August, September, and October.

"Bids for the week ending July 17 ranged between $2,700 and $3,200 per car for BNSF Railway's guaranteed grain car placement in September and between $2,800 and $3,000 per car for placement in October," according to USDA's weekly transportation update.

While most trading typically occurs in the secondary railcar market where shippers buy/sell cars originally bought in the weekly COT auctions, shippers are worried that cars will be hard to come by this harvest. This has sent many shippers vying for the weekly allocated cars sold by the BNSF in the primary freight market.

"Unlike premiums paid in the secondary railcar market, which are transferred between shippers and do not affect railroad profits," said the USDA, "premiums paid in the primary market accrue directly to the rail carrier."

Barge freight rates on the U.S. river system have also been moving higher since the rivers reopened after nearly three weeks of closure due to flooding which caused locks in the Upper Mississippi River and parts of the Illinois River to close, stopping barge movements. Now, as shippers try to catch up on shipments, empty barges are in high demand, sending freight costs substantially higher.

"As of July 22, barge rates for export grain from St. Louis and the Lower Illinois River were $15.76 and $25.38 per ton, respectively," USDA reported. "Since July 1, the St. Louis rates rose 52% and the Lower Illinois River rate increased 44%."

Barge operators are expecting demand to be higher than normal when the U.S. corn and soybean harvests start, which is sending October barge freight higher as well. "October rates for barge delivery to St. Louis and the Lower Illinois River are $25.86 and $34.66 per ton, respectively," USDA reported.

Higher freight costs both on land and in the river system will be and have been a big factor for U.S. corn, soybean and wheat basis levels this year. If end users are unable to procure grain when needed, they will absorb the freight costs for the most part. If grain is moving at a steady pace, it is likely that elevators and eventually farmers will have to absorb those higher costs.

Mary Kennedy can be reached at mary.kennedy@dtn.com

Follow Mary Kennedy on Twitter @MaryCKenn

(CZ/SK)

Posted at 2:20PM CDT 07/25/14 by Mary Kennedy
 

Tuesday 07/22/14

Imaginary Numbers

The soybean market is still reeling from USDA's July 11 supply and demand report where soybean ending stocks for 2013-2014 were increased to 140 mb, due to a reduction of residual use to a minus 69 million bushels. Maybe you are asking yourself: How can a demand category can possibly be negative?

As DTN Markets Editor Katie's article "The Root of Residual," states, a negative residual use number isn't anything new. In fact, I remember working with her predecessor Pat Hill on a similar article back in 2007, the last time USDA played this powerful wildcard.

It should come as no surprise that I disagree with this practice and here I provide a point-by-point counter argument to USDA's explanation contained in Katie's article. I seriously question the process USDA follows.

The piece states that residual is a statistics term, a numeric value that represents how far off your original predictions were. This includes the abstract (another fun math term) "discrepancies in measurement." Again, the idea that USDA, or anyone, knows how many bushels (tons) are actually produced, used, and left over is a fallacy. It's all estimates built on estimates, with things like residual use making up the difference.

For now I'll leave the assertion that the hilarity that is corn quarterly stocks can somehow be tied to the inability to reconcile its balance sheet alone, except for the comment "counting new-crop as old-crop."

The crux of the matter is that the National Agricultural Statistical Service seems to have an interesting equation. In the piece it states this formula: Supplies - Use - X (residual use) = Ending stocks. With it being stated that residual use is the ONLY variable, the conclusion is that ending stocks are assumed before all demand can be subtracted. In times when supplies don't seem to be there, that means residual use has to be dropped into negative territory to maintain the expected ending stocks figure.

I wish I could do my accounting that way. I would estimate my life savings considerably higher, then create a debit category that can be negative to make it a "reality." That would be fun right up to the point of another powerful government agency telling me it isn't exactly legal, with penalties soon to follow.

I find it interesting that toward the end of the piece USDA says domestic soybean ending stocks-to-use hasn't fallen below that magical 4.5% level -- until now. But, given the open-ended system of accounting USDA has at its disposal, don't be surprised if enough 2013 bushels are eventually found to bring us back to this imaginary floor (the July ending stocks-to-use figure was 4.1%).

Why the false floor in soybean ending stocks to use? It's simple: What would happen if the world's largest buyer of soybeans was told supplies might not be available to meet demand? And that your largest competitor has boatloads of them ready to move?

I could go on forever. The bottom line is as it always has been: These reports are unnecessary up until the point that all the variables, including residual use, have been given a value. In other words, there is no need for the monthly volatility created by USDA, NASS, and WOAB guessing at what the supply and demand situation is.

Come this October, when all the tallying has been done for the 2013-2014 marketing year (not the 2014 crop mind you), a single, final report should be released. The information would be outdated enough that the markets shouldn't react, but valuable enough for later study when analyzing past supply and demand issues.

That's it. One report that looks back rather than trying to project forward, and without the fanfare that surrounds what we see today.

But it will never happen. It will never be allowed to happen. Therefore imaginary numbers like soybean residual use will continue to cause havoc for U.S. (and global) producers.

(CZ)

Posted at 6:45AM CDT 07/22/14 by Darin Newsom
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

OMAHA (DTN) -- 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.

This chart shows barge movement of grains on the Mississippi River. (Chart courtesy of AMS/USDA Grain Transportation Report)

A North Dakota Canadian Pacific Railway shipper told DTN he just loaded a wheat train that was ordered for March 3 and his next train that comes will have a March 6 want date. He said he is "...dumping old crop daily and it seems to be coming out of (the) woodwork."

In their weekly service report to the Surface Transportation Board, CP reported it has "Cumulative Open Requests (unconstrained)" car orders of 24,280 in North Dakota and 7,888 in Minnesota and is 10 weeks behind. "Grain hoppers online in the U.S. are at 3,649 and their grain hoppers offline in the U.S. are at 4,513," CP stated.

"Demand remains stable for Eastern milling markets, and we continue to fill all Pacific Northwest (PNW) demand presented. The demand for movements west through the PNW continues to be weak. Despite the fact that we have nearly 13,000 open PNW requests, actual go-forward demand on the PNW at present is between 600 to 800 cars per week," CP reported. Here is the link to the full July 14 CP service report to the STB: http://goo.gl/…

A BNSF shuttle loader in eastern North Dakota said he has one more corn shuttle to load and hopes to be cleaned out by mid-August and ready for harvest. A non-shuttle station operator in western North Dakota said he is currently loading cars he had ordered for early June. "There is a lot of old crop left to move and the situation is not looking good. On top of that, secondary freight costs have risen and last week singles went for $2,000 per car to $2,300 per car. This week, secondary freight is trading at $3,000 per car with shuttle offers at $3,500 per car," he said.

On July 11, the BNSF updated the STB on their service and car placements. According to the July 11 podcast, there were on average, 6,720 cars owed vs. 7,388 the prior week and days late were at 27.1 vs. 26.6 the prior week. North Dakota is still owed the most cars with 4,243 cars owed vs. 4,696 the week prior and has been waiting 29 days vs. 28.5 days the prior week. Montana is owed 1,212 cars, Minnesota is owed 613 cars and South Dakota is owed 229 cars.

John Miller, vice president of BNSF ag products, said, "Despite the impact of localized flooding along the Mississippi River, the overall network performance experienced areas of good improvements."

Miller said, "For the week ending July 8, overall on-time performance increased 13 percentage points compared to the prior week and is 35 percentage points better than our baseline week in early February. System velocity, which is defined as miles per day (MPD), slowed to 173.5 MPD for the week ending July 8 compared to 177.5 the prior week, but is still nearly 2% better that our baseline week in early February when we were at 170.8 MPD." Here is the link to the BNSF July 11 filing to the STB: http://goo.gl/…

CANADIAN RAIL UPDATE

The CN railroad reported an average weekly car-spot (cars placed on tracks at an elevator siding) of 5,544 in June, 2,311 cars per week above the five-year average of 3,233 cars," said DTN Canadian Grains Analyst Cliff Jamieson. "Canadian Grain Commission data for week 49, or the week ending July 13, indicates 919,000 metric tons of all grains were shipped from the primary elevator system on the Prairies, which is just slightly higher than the 10-week average."

Jamieson continued, "CP Rail's announcement of a record quarter is being heralded by the media as the company's turnaround continues, with the company's second quarter profits up 48% at $371 million. Revenues from grain rose 32% from the previous year in Canada while achieving a 26% increase in the United States. The company reports that oil by rail movement could increase to one train per day by the company's fourth quarter."

MISSISSIPPI RIVER MAY OPEN BY JULY 18

Ingram Marine barge company reported July 17 on their website that, "Upper Mississippi River locks have all reopened. The river is still closed at the Louisiana railroad bridge, forecast to reopen to navigation sometime Thursday, July 17, 2014."

The Louisiana Railroad Bridge crosses the Mississippi River between Louisiana, Mo., and Pike County, Ill. While rail traffic on the bridge is operating normally, the USDA's Grain Transportation Report said, "Additional work is needed to allow barge traffic to pass through the swing bridge portion. Assuming river levels continue to fall, and the bridge is cleaned and maintained, barge traffic will be able to travel the entire navigable portion of the Mississippi River by July 17 or July 18."

With the Mississippi and Illinois Rivers now open as waters recede, barge freight rates have begun to rise as terminals unable to move grain the past three weeks are looking for empty barges. USDA reported as of July 15, barge rates for the Twin Cities to New Orleans were $31.45 per ton, 18% higher than before the flood began three weeks ago. On the lower Illinois River, barge rates were $18.79 per ton, a 17% increase over last week.

USDA's Grain Transportation Report from Thursday stated, "During the week ending July 12, barge grain movements totaled 491,048 tons -- 29.2% lower than the previous week and 19.6% lower than the same period last year. During the week ending July 12, 322 grain barges moved down river, down 22.8% from last week; 600 grain barges were unloaded in New Orleans, up 4.3% from the previous week."

Mary Kennedy can be reached at mary.kennedy@dtn.com

Follow Mary Kennedy on Twitter @MaryCKenn

Follow DTN on Twitter @dtnpf

(AG/CZ)

Posted at 12:54PM CDT 07/18/14 by Mary Kennedy
 

Wednesday 07/16/14

Winning at the Waiting Game? Not in Ag Commodities

Investors can win by waiting in commodities, as a recent Wall Street Journal article suggests, but it's only when markets have a bullish, or inverted, structure. It's a risky proposition in most agricultural commodities right now, DTN Senior Analyst Darin Newsom said.

The Journal article explained the "rolling" strategy: "A fund manager buys a futures contract for delivery next month. Right before it expires, the investor sells the contract, buys a cheaper one for delivery at a later date and pockets the difference."

It went on to say that this strategy would work in 11 of the 24 commodities in the S&P GSCI Index, and that a fund tracking the index itself would have earned 1.8% from rolling contracts forward this year, even though the overall index was down slightly.(Here's the article: http://on.wsj.com/…).

"The article states that investment traders can make money in a situation where the nearby futures contract is higher priced than the deferred contract. That is simply an inverted (backwardation) situation, and as such a forward curve reflecting a bullish view of supply and demand by commercial traders. So restating the writer's thesis, investment traders can make money in a market with bullish supply and demand.

"How do they do that? Buying the nearby contract, holding it short-term, and rolling to the next, and the next, as long as the market remains inverted is standard operating procedure. Investors that do that in a carry (or contango) market usually suffer the consequence (e.g. 2008 crude oil)."

So what markets might this work in? Which ones have a bullish forward curve?

-- Corn: The new-crop forward curve shows a strong carry (roughly 67% of cost of carry) = Bearish

-- Soybeans: The old-crop forward curve remains inverted, but an investor will take his life in his hands betting on the August or September contract against the new-crop November

-- Wheat: Moving on.

-- Crude oil: The forward curve is showing contango (carry) but this has been weakening of late. Along with that, investors have lightened their net-long futures holdings.

-- Natural gas: Deferred contracts show a contango in the forward curve. However, what will happen in the market known as "The Widowmaker" is anyone's guess.

-- Gold: A different breed of commodity in that it has a more stable S&D situation. The market tends to show a slight contango, and such is the case again this year.

-- Live cattle: A minefield for an investor that doesn't understand the dynamics of a livestock market. Each contract is a harvest in and of itself. The investor has to be aware of how the current spread relates to historic levels, meaning a backwardation could still be bullish or a contango bearish.

-- Lean hogs: Ditto live cattle, but for traders who also like playing Russian roulette.

-- Cotton: Strong carry in the futures market hints at a continued bearish supply and demand situation despite the recent collapse (seasonal sell-off) in price.

-- Sugar: Forward curve situation similar to cotton

-- Coffee: Contango anyone?

-- Cocoa: Finally, a market in backwardation that investors might buy into. The only problem is that cocoa has been rallying for almost 2 years now.

What I find interesting about the timing of this article is its timing. Money has been flowing out of commodity hedge funds over the past few years, and as Newsom pointed out: "In general, noncommercial positions (mostly net-long) are smaller than they have been in years past. One exception is crude oil where the continued backwardation has led to recent long holdings of 550,000 contracts (more or less)."

While some investors may be happy making 1.8% on commodities, it pales in reflection of the potential earnings in equities right now. The author's premise may be correct. Yet, it's an obvious strategy that's more applicable in some markets than others. It's not a strategy for the grain markets right now.

(CZ/SK)

Posted at 12:59PM CDT 07/16/14 by Katie Micik
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

OMAHA (DTN) -- Conditions are improving for barge freight on the upper Mississippi River, but downstream problems remain an issue.

(Photo by USACE Mississippi River Rock Island District)

The U.S. Army Corps of Engineers, St. Paul District, reopened its three Minneapolis locks to commercial navigation Saturday, July 5, when flows dropped below 40,000 cfs. "So far this navigation season, the three Minneapolis locks, have been closed to commercial navigation four times, totaling 47 days," said the USACE. "Commercial traffic at these locks is shut down at 40,000 cfs."

Barges that were parked down river of the closure near Minneapolis were placed for loading at river terminals in St. Paul. However, they will be unable to get downriver yet as Locks 16 through 18 and 20 through 22 remained closed in the Rock Island District as of July 11 due to the water overtopping the miter gates, making them inoperable according to the USACE. Here is the link to the USACE Rock Island District Lock closures:

http://www.mvr.usace.army.mil/…

Farther down the Mississippi River in St. Louis, the water rose above flood stage and is at 30.98 feet as of July 11. Levels are expected to reach 31 feet by July 12 before falling. Flood stage is 30 feet above zero gauge.

The USACE St. Louis District said barge traffic on the river will continue to be affected by high water. Lock and Dam 24 in Clarksville, Mo., and Lock and Dam 25 in Winfield, Mo., are still closed to traffic as of July 11.

"Lock closures are essential to protect critical components and facilities from flood waters and be able to restore services as quickly and economically as possible after water levels recede," said the USACE. Barge lines have reported it could be sometime during the week of July 14 before the river reopens to traffic. Here is the link to the USACE ST. Louis District, river and reservoir daily report: http://mvs-wc.mvs.usace.army.mil/…

HIGH WATER ALSO HITS RAIL TRAFFIC IN U.S., CANADA

The BNSF reported on July 3 that it experienced flooding at multiple locations through the Missouri and Iowa regions on the Hannibal Subdivision.

According to the latest service update, "flooding and the potential for flooding along various sections of the Mississippi are keeping our crews and meteorologist busy. While the size of our network allows our dispatchers to re-route trains and plan trips around areas that are at risk for disruptions, those re-routes can create some challenges. Some trips will take longer since we are not able to use the most optimal route and adding traffic to certain traffic lanes means that our velocity and throughput becomes temporarily affected.

"In particular, our Hannibal subdivision, which is located in central Illinois along the Mississippi river, is out of service due to flooding in the area. We are managing that outage by re-routing traffic and using alternative lanes so as to continue service to customers. On our Ottumwa subdivision, which is also near the Mississippi in southern Iowa, our crews have been able to raise the track as much as 12 inches at a critical location in Burlington, Iowa, which allows that section of track to remain in service."

The CN (Canadian National Railway Company) reported on July 9 that "A number of branch lines suspended operations on Sunday, June 29, and have since resumed at least partial operations. The Cromer line partially reopened on Sunday, July 6. Both the Cromer and the Quappelle lines are scheduled to resume full operations on Monday, July 7. In the interim, local service to customers located along these branch lines may continue to encounter some delays. CN continues to keep a close watch on conditions in southern Saskatchewan and southwestern Manitoba and will continue to respond as required."

The CN reported a derailment along the Kingston subdivision of the CN main line on Thursday, July 10, near Brockville, Ontario, which affected trains due to transit along the Montreal/Toronto corridor.

On July 11, the CN reported that "repairs to the site were completed as of 1100 hours EDT on Friday. July 11. Customers should expect that traffic scheduled to run through the affected area may incur minimal delays during the return to normal traffic levels."

"Speed restrictions remain in effect along the Sprague and Fort Frances subdivisions. As a result, trains running between Winnipeg, Manitoba, and our Ranier, Minn., border crossing are operating with some delays." Here is the link to the CN State of the Railroad web page: http://goo.gl/…

BNSF, CP RAIL COMPANIES PROVIDE SECOND SERVICE UPDATE TO STB

On July 7, the BNSF reported to the STB (Surface Transportation Board) there was an average of 7,388 past due cars vs. 8,462 for the prior week and were 26.6 days late. Minnesota was owed 743 cars with days late at 16.9; Montana was owed 1,415 cars with days late at 29.8 and North Dakota was owed 4,696 grain cars, with days late at 28.5 days late. The entire report (PDF) by the BNSF to the STB can be seen here: http://goo.gl/…

The Canadian Pacific (CP) reported it was behind 10,000 to 12,000 cars and on average and were nearly 10 weeks late. The CP also reported new open order requests of 24,786 cars in North Dakota and 8,186 in Minnesota. The entire report (PDF) by the CP to the STB can be seen here: http://goo.gl/…

Mary Kennedy can be reached at mary.kennedy@dtn.com

Follow Mary Kennedy on Twitter @MaryCKenn

(AG)

Posted at 4:51PM CDT 07/11/14 by Mary Kennedy
 

Thursday 07/03/14

Informa Pegs Corn Yield at 165 BPA, Soybeans at 44.5 BPA

OMAHA (DTN) -- 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.

The national average corn yield is forecast at 165 bushels per acre, 1.6 bpa above its previous estimate, and a soybean yield of 44.5 bpa, even with its last forecast. Both are slightly below USDA's estimates.

Informa adjusted USDA's acreage figures using data from its own survey of farmers. It thinks farmers planted corn on 91.39 million acres with harvested acres projected at 83.24 ma.

The corn harvested acreage estimate is 600,000 less than USDA's with the difference stemming from a 250,000 acre reduction in planting and 350,000 acres abandoned due to excessive moisture.

"Informa said Thursday that they expect the 2014 U.S. corn crop to total 13.73 bb, down 1.4% from 2013, but still large enough to expect increased supplies in 2014-15," DTN analyst Todd Hultman said. "Their estimate is reasonable, given USDA's estimate of 91.6 million planted acres of corn and suggests a yield of 165 bpa."

Farmers are likely to harvest 83.23 ma of soybeans, Informa said, 830,000 less than USDA's June estimate with the reductions coming fewer planted and harvested acres in from Ohio, Michigan, Louisiana, Illinois, and South Dakota. Informa sees abandonment increasing in Minnesota, Iowa and North Dakota.

"Informa's estimate of 3.7 billion bushels is slightly below my estimate of 3.8 billion bushels, but it is too early to take any slight differences seriously," Hultman said. "The clear point is that outlooks for both corn and soybeans are bearish this year, but that was already known before Informa's estimates.

USDA's World Agricultural Outlook Board will release its initial projections of U.S. production in its next report on July 11 at 11 a.m. CT. As Informa and Hultman pointed out, these early estimates could readily change as growing conditions improve or worsen.

USDA will also update supply and demand tables in its upcoming report to include the recent Grain Stocks report, which indicated larger corn and soybean supplies on hand than previously thought.

Informa also sees sorghum production exceeding last year's production by 39 mb, totaling 428 mb. Although acreage has decreased, yield prospect are likely to improve. Informa estimates yield at 66.9 bpa, up 7.3 bpa from last year.

Informa also released its Crop Production report for the wheat complex. USDA will update its winter wheat production and issue its first spring wheat production numbers in its next report.

"Informa's estimate of U.S. winter wheat production was reduced to 1.37 b bu, slightly below USDA's estimate of 1.38 bb, but not a significant change," Hultman said.

Informa forecast spring wheat production at 534 million bushels with an average yield of 43.2 bpa.

The firm's global forecasts included a few changes. Informa increased Brazilian corn production to 76.5 million metric tons, which is 2.5 mmt above USDA's estimate and "suggests that USDA may increase its world corn production estimate in the July 11 WASDE report."

Informa also reduced its India wheat production forecast to 99 mmt, which is 3 mmt higher than USDA's June estimate. Argentina wheat production was boosted from 13 mmt to 13.75 mmt, which is above USDA's estimate of 12.5 mmt.

"Overall, the outlook for world wheat is bearish and nothing in Thursday’s Informa numbers changed that," Hultman said. "I see nothing here to change the markets’ already bearish outlooks for corn, soybeans, and wheat."

(CZ/SK)

Posted at 11:09AM CDT 07/03/14 by Katie Micik
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 door.farmers know truth.hold it back from thieves.it 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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