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USFR Weekly Recap - April 14-15, 2012

April 16, 2012

APRIL 14-15, 2012

JOHN’S OPEN: Hello and welcome to U.S. Farm Report, I’m John Phipps. I've had some queries about our problems getting our planter going. As I shared three weeks ago a combination of tractor, planter, and technology of mixed breeds was proving to be troublesome. Several of you shared your irritating machinery stories. The good news is we did get started thanks to some brilliant troubleshooting by Aaron. The bad news is we did get started. Tyne has some photos later in the news that look familiar. I'm not whining. I knew the odds of a late frost, and knowing our machinery is finally working is a comfort. Still weather whiplash messing with farmer heads in much of the Corn Belt. Let's get started with Tyne Morgan and the headlines.

COLD WEATHER: Thank you John and hello everyone. After shattering weather records last month with un-seasonably warm temperatures, farmers in much of the eastern half of the country got a brutal reminder that it's still early April. One of the most susceptible crops was grapes. Thermometers dipped into the upper 20's in much of the upper Midwest at mid-week. From Iowa to Ohio, vineyards are reporting some damage from the cold. Like fruit trees, grapevines were weeks ahead in progress. And some early-planted corn was damaged as well. This photo was taken in Champaign County, Illinois where corn planting started three weeks ago. It shows corn at five-leaf stage that was burned by temps in the upper 20's.

PLANTING PROGRESS: Despite the peril of a spring frost, many farmers are planting corn almost a month earlier than the usual mid-April planting dates. In its weekly crop progress report this week, USDA said 7% of the nation's corn is now planted. The five year average is just 2%. In Illinois, 17% is planted. It's normally just 1% at this point.

GRAIN STOX: USDA says there's no change in domestic corn stocks but it dropped world bean production. In its monthly supply-demand report, USDA kept corn-ending stocks steady at 801 million bushels. Most analysts expected a sizeable decline. Soybean ending stocks were cut 25 million bushels to 250 million bushels and the wheat carryover is 32 million bushels less than last month.

SOUTH AM CROPS: Meanwhile the South American drought is cutting into some of Brazil and Argentina's crop production. USDA further cut Brazil's soybean crop at 66 million metric tons, a decrease of 2.5 million from March. Argentina's soy crop came in at 45 million metric tons, down 1.5 million.

2-4D: The EPA ruled in favor of farmers who use a popular herbicide ingredient called 2-4D. The National Resources defense council had asked EPA to ban the product saying it can hurt the genetic make-up of wildlife. 2-4D has been around since the 1940's. It's used on millions of acres of farmland to control broadleaf weeds. It's also used in lawn care treatments.

ROUND TABLE: Our round table guests today Tom Grisafi and Greg Milkovoch. Though you deal with the markets are you dealing a different point of view or is it the same? We cross paths a lot. I always appreciate the farmers input. As my trading style has changed the farmers have become the most important thing in farming and agriculture, helping me speculate. Sometimes the farmer makes like we talked about this morning makes poor decisions in marketing their crop. Correct. If I see corn at $5.80 and then it goes to $5.40 and now the farmer decides to sell I may think there is a short term bottom because they waited too long. Understanding that helps me speculate better. Are you --your goal is to get your own money. Yes. And I only lose my own money. When you only deal with farmers you try to protect. So what is a kind of thing -- he told us a bit the kind of things he thinks in order to speculate. I appreciate the speculators because they provide us with liquidity. A lot of them are looking at the technicalities which play a big part in the markets, you can't base your decisions --purely on fundamentals. It's very important to watch -- be well rounded. I think that's kind of one of the things I like to talk about. Seems like what's happening outside of our planting and supply demand is actually affecting our markets a good bit at this point in time. Is that correct? Absolutely. The upside market, I trade a lot off them because I'm trading on a global, 22, 23 trade cycle. Today is a good example. Last night when GDP came out and disappointed some the markets starting to take a negative tone and never looked back. A lot of them are down today. Markets I like to watch as far as good outside are copper and the stock market. I like watching the German tax. They are stable and are supposed to be bailing everybody out so --it was high as 7200 and today it's 6500. It's lost that in the last few weeks. Have you to watch that. If you like it or not there is a constant risk on risk off strayed, obviously if it was that easy watching one thing and speculating something else. Today the grain markets took off one to 2% across the board and that was up after being up all night. Grain market dear sir start up all night and then sell off quickly based on the outside. So, now do you watch what he is talking about in order to be able to figure out the kind of positions you need to take for the producer? Yes. You need to. When Europe right now you need to watch that, all the concern about the economy thereof some of the Portugal, Ireland. Spain --the yields were high and that reflected badly on the markets the next day. Today, you know with China, GDP --coming and moving the markets I think we are geared a little more to the fundamentals today, the brake can be --to seeing rain that we saw coming across the very dry areas in an anticipation of the coverage being good. Corn took it on the chin. Most are getting used to look at what happens in South America and other place around the world but we are in a world grain market? Absolutely. Have you to pay attention to South America, China is another good example. They are a big corn area, it's very cold and dry right now. Russia the drought affecting the wheat crop in France and Germany and Poland. You just can't look in your own backyard. When we come back, one of the things I want to do is look in our one backyard and predict what the prices will be this summer, what we need to watch for. When we return in just a moment. I think we are getting near a top in the bean market. Leaning one way, open interest at record levels, we have had production concerns, which are real in South America, demand has been great. I just talked to another analyst and he said we will probably touch 15-dollar beans, 5-dollar corns. Who will buy at these levels? I think we will see it blow off a little and come June or July. I think --we are near top. How about corn? The corn will go lower. It'll be volatile. I'm not saying sell up to your insurance guarantee but you do want to start pricing it out there. If we have a weather scare we have good rains, we will see how much the coverage was there. Is a chance pretty good chance we will see a weather scare at some point. We will all watch the weather. We will be back with more in just a moment.

JOHN’S WORLD: An old friend and neighbor passed away this week. He was a contemporary of my late father, and his passing prompted some reflections on what the slow loss of this generation means. My father's cohort was the last to remember what purely muscle-powered agriculture was all about. Mechanization began early in his career and was eagerly welcomed, according to him. "Nobody cried when horses left the farm" he often told me. One mental legacy of that era is still with us. When human and animal effort was the only way to get anything done, the largest single determinant of success was how hard and long you worked. That value is still a controlling ethic for our industry.  It is therefore unsettling for many to see capital and technology overwhelm hard work as the key to success. It still matters, of course, but labor is not even close to our largest input for much of agriculture. Worse still, the nature of hard work itself is constantly evolving. Is it hard work if you are not sweating? Sure feels like it to me. While dad didn't do much desk work, I struggle to get outside, and Aaron pretty much carries his desk with him. I sometimes wonder if the growth of very large farms is a relic of this work ethic. Perhaps one reason we keep expanding is simply because we don't feel like we're working hard enough. Maybe our definition of hard work will eventually expand to more than muscle effort. I hope so. But it takes a long time to outgrow your father's values. Let us know what you think.... Send emails to mailbag@usfarmreport.com or call and leave us a voice mail.

Hello and welcome to U.S. Farm Report, I'm John Phipps. Everybody talks about the weather...and then talks about it some more, it seems. The desire for "normal" weather is a constant theme wherever farmers gather, I know. The problem is a growing uneasiness that normal itself may be changing. While memory is poor evidence, our recollections of the past few years seem cluttered with extreme examples of temperature and precipitation. Last month is just the latest exhibit. I think it's beginning to affect how producers prepare as well as our expectations. The margin of error for our yield estimates keeps getting wider in our spreadsheets and our minds. Let's get started with the headlines and Tyne Morgan...

FDA ANTIBIOTICS: thank you john and hello everyone. The food and drug administration took action this week to limit antibiotic use - and it extends beyond the farm. FDA says it wants to reduce the potential problem of drug-resistant bacteria that may be passed to humans through food. In the guidance guidelines, FDA says antibiotics should only be used for therapeutic purposes, such as treating diseases, and only under the supervision of a licensed veterinarian. The agency says it will work with animal health companies to encourage them to stop selling antibiotics to livestock and poultry producers who use them for nutritional purposes.

MARCH WEATHER: There's a new weather entry into the record books. The lower 48-states experienced its warmest march on record. The average temperature was 51 degrees, nearly nine degrees above the average. "NOAA" says there were 15,000 records broken nationwide - either as record daytime highs or record nighttime highs. Monthly temperatures averaged at least 15 degrees above normal at numerous Midwestern locations

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