Pro Farmer newsletter.

' /> From the Editor |

Sep 30, 2014
Home| Tools| Events| Blogs| Discussions Sign UpLogin

February 2014 Archive for From the Editor

RSS By: Brian Grete, Pro Farmer

Pro Farmer Editor Brian Grete takes time to talk with Pro Farmer Members about some of the key issues in each week's Pro Farmer newsletter.

$14 Old-Crop Beans!

Feb 28, 2014

Hello Pro Farmer Members!

March and May soybean futures surged above $14.00 this week -- nearly $2 above the Jan. 30 low at their weekly peaks. With Brazilian crop estimates declining and concerns about the timely shipment of soybeans from the country on the rise, worries about active Chinese cancellations of U.S. soybeans have been reduced. Instead, there’s anticipation (an expectation) USDA will have to raise its export forecast and further tighten 2013-14 ending stocks, which are already projected to be tight at 150 million bushels. Soybean export bookings (exports + outstanding sales) are already 6% above USDA's 2013-14 export forecast of 1.51 billion bushels. That would suggest USDA's export forecast is currently 87 million bu. too low. Sure... USDA has 12 million bu. of "play" in the residual category, but the current export bookings pace suggests old-crop carryover could be halved if there aren't significant cancellations of U.S. old-crop soybean purchases. Obviously, old-crop carryover will end the current marketing year higher (much higher) than 75 million bushels. And obviously, there will be some old-crop bean cancellations. But China will continue to buy and take shipment of U.S. old-crop beans until they can guarantee a timely supply of Brazilian beans -- and that isn't currently the case.

Bird flu has caused Chinese crush margins to fall below breakeven, backing up supplies at ports. There were reports late this week that a northern Chinese port had stopped unloading soybeans because storage was full. This is something to keep a watch on, but Chinese industry sources don't expect much (if any) slowdown in Chinese imports of U.S. beans anytime soon given the aforementioned concerns with obtaining Brazilian supplies.

The market's job is to find a price that slows use (crush and/or exports). But we don't appear to be anywhere near that price. After all, the runup to the all-time high of $17.89 in 2012 triggered only a 1.8% decline in total use from 2011-12 to 2012-13. What makes anyone believe old-crop bean prices around $14.00 will significantly deter use?

While everything appears to favor bulls, I don't want you to get too "bulled up." After all, it's important to consider all factors -- bullish or bearish -- when making marketing decisions.

Markets typically top when everything looks bullish. And there are some potential red flags that can’t be completely brushed aside.

Funds are estimated to be long roughly 1 billion bu. of soybean futures. And open interest has surged on the price rally, signaling there have been a lot of new longs added on the rally. The last time the fund long position and open interest were this large, the market was putting in its all-time high.
The question is whether there’s enough incentive above $14.00 for funds to continue to pile money into the long side of the market.

That answer is likely to come from demand, specifically export demand. And that' means China and Brazil are the two near-term fundamental focal points.

Don't forget technicals. Rallies like this typically end with a relatively clear technical signal -- a key bearish reversal, exhaustion tail, blowoff top, etc. Thursday's wicked day of price action that featured a 60¢ trading range and nearly a key bearish reversal in nearby soybean futures was a potential warning sign. But the quick and sharp rebound in prices today signals bulls aren't ready to give up yet.

Get used to the increased volatility. With old-crop futures surging to contract highs this week, the odds of wild, unexpected price moves increase.

That's it for now...

... have a great weekend!

Follow me on Twitter at @BGrete

To join Pro Farmer, click here!

USDA's acreage projections look familiar

Feb 21, 2014

Hello Pro Farmer Members!

Much of the attention at USDA's Ag Outlook Forum this week was on planted acreage assumptions for the 2014 crop year. USDA Chief Economist Joe Glauber made it clear ahead of time corn acreage would be down from the baseline projections released last week and soybean acreage would be up. And that's exactly what USDA did, lowering its corn acreage projection 1.5 million acres from the previous baseline figure, to 92 million acres, and increasing projected soybean acreage 1.5 million, to 79.5 million acres. If anything, the increase in the soybean acreage figure was friendly (yes, friendly) as it came in lower than many are projecting for the upcoming crop year. The real talk surrounding the acreage projections, however, was whether USDA has enough total acreage plugged into its assumptions. Total corn, wheat and soybean acres are projected to decline a net 1.1 million acres this year to 227 million acres.

That figure lines up with the total corn, soybean and wheat acreage tally we've been using at Pro Farmer Profit Briefing seminars this winter. In fact, our total for the three crops is just 900,000 above USDA's projections -- under our "average" weather scenario. We just get there with a little different mix (more beans, less wheat and and equal number of corn acres). If there's a question on USDA's acreage numbers, in my opinion, it's on the total for the eight major crops, which is forecast to decline to 253.8 million this year, the lowest since 2010. Lower prices will remove some of the "fringe" acres that came into production since 2010, but probably not quite as much as USDA is projecting. With that said, sharply lower price projections for new-crop corn and soybeans, don't favor these being the crops that potentially pick up a major amount of acres. In addition to prices, weather will have a say in the final acreage mix this year.

Speaking of weather... Did you see the government's forecast for spring? Below-normal temps are expected to be seen across the Upper Midwest for March through May. After the winter we've experienced, that should be a surprise to no one. But it the forecast materializes, there won't be a normal start to the planting season in this area again this year. Plus, with very heavy snowcover east of the Mississippi River, the eastern Corn Belt is looking at a potentially wet spring. It's hard to believe, but after last year, a late, wet spring may actually be seen as bearish. Of course, what traders may forget is the favorable weather around pollination and the extra three-plus weeks we had on the end of the growing season that allowed corn and beans to finish very strong.

The government's extended forecast also calls for above-normal temps to continue across much of Texas for March through May. If that's the case, it will increase moisture needs for a crop that's already reeling. After getting off to a strong start last fall, the HRW wheat crop has done nothing but go backward this winter. The situation isn't dire for the crop as whole, but timely spring rains will be needed (when aren't they?).

The SRW wheat crop isn't getting much attention as the HRW crop since most SRW states don't update crop ratings through the winter. But the harsh winter has also taken a toll on that crop, too. In talking with some SRW wheat growers this week at our Eastern Belt Profit Briefing seminar in Peoria, they questioned what shape the crop would be in when it breaks dormancy given the repeated attacks from Mother Nature. As one put it, "the wheat crop may have nine lives, but it's using them up this winter."

That's it for now...

... have a great weekend!

Follow me on Twitter at @BGrete

To join Pro Farmer, click here!

Titles change, but our goal remains the same

Feb 14, 2014

Hello Pro Farmer Members!

The change is official! Chip Flory is now the Editorial Director at Pro Farmer and Brian Grete is the new Editor of Pro Farmer newsletter. Brian is sliding smoothly into his new role... and Chip is scrambling to get ready for the launch of a new project. In this week's "From the Editor," Chip and Brian say goodbye to old responsibilities and hello to their new roles.

From Chip --

It’s difficult to put into words how rewarding it has been to be the editor of your newsletter for the past 17 years. It’s humbling that many of you have put your trust in me to help keep you informed on the issues that really matter that entire time. And the newer relationships we’ve started through Pro Farmer newsletter are no less important.

I do feel a personal connection to all Pro Farmer Members. I’ve always tried to put myself in your shoes when communicating why I believe issues are important. It has been a personal mission of mine to make Pro Farmer newsletter important to you.

I realize some times have been better than others, but that’s to be expected. One thing I respect deeply about many of you is that you’re not afraid to have a conversation about disagreements and you aren’t afraid to make a decision on your own.

With inspiration from those conversations and the great enjoyment I get from talking directly with you at seminars, I’ve decided to take on a new challenge.
Market Rally will launch March 10 and will air on several Midwest radio stations from 2 p.m. to 3 p.m. CT Monday through Friday. I’ll be the host of the show and I have a new mission.

Market information is typically delivered in a one-way flow from a reporter, an analyst or an editor to you. Market Rally is a two-way flow of information. While delivering the news of the day and talking with guest analysts, I’ll be thinking about you. I’ll do my best to be your voice to ask the right questions to help erase the confusion of what’s happened — and what might happen — in the markets. And instead of me asking the questions for you, we’ll also take your calls, emails and tweets and give you a chance to be part of the flow of information around the markets.

But I’m not leaving Pro Farmer. I’ll still give my opinion (whether Brian wants it or not) on news and risk-management as the editorial director. And I’ll still talk with PF Members directly on the website and at seminars.

And I’ll have time to work on bigger-picture projects for Pro Farmer. Working on things like "Making the Family Farm the Family Business" and the "Marketing Education Series" were personally satisfying because I know the information is important. The PF Membership inspired me to do those projects, and I’m looking forward to similar efforts in my new role.

At the risk of sounding cheesy, being Pro Farmer editor is what I’ve always wanted to do. It’s what I trained for at Iowa State University’s ag journalism school. Thank you for letting me do it for the past 17 years.

But it’s time for a change... and Market Rally is exactly what I want to do next.

Follow me on Twitter at @ChipFlory

From Brian --

I’m extremely excited and grateful for the opportunity to be the next editor of your newsletter. While this is the start of my hopefully long journey as editor, it is by no means the beginning for me. Over the past 18-plus years at Pro Farmer, I have had an opportunity to meet many of you at Pro Farmer seminars, on Crop Tour or at numerous industry events. I’ve had the pleasure of communicating via phone or email with even more of you. And for the past 11-plus years I’ve shared my thoughts and perspective on the markets with you on the analysis pages of the newsletter as your senior market analyst. As Chip stated, there have been ups and downs over the years, but I truly love what I do and everything Pro Farmer stands for.

To say I have big shoes to fill would be an understatement. Chip has been my mentor since day one at Pro Farmer, and my respect and admiration for everything he has taught me runs very deep. I’d be remiss if I didn’t mention Jerry Carlson, co-founder of Pro Farmer and one of the greatest writers and story tellers I know. Jerry was in phase-down mode when I started at Pro Farmer, but he still had a major impact on shaping my career.

While you may notice some modest changes in how the news pages of your newsletter are laid out or the news is presented, there won’t be a drastic difference. Chip and I are cut from the same cloth and our style is much the same. Most importantly, my mission is the same as it has always been at Pro Farmer — to deliver you concise, easy-to-understand news and analysis you need to make educated business and risk-management decisions that keep you in business for the long haul.

To think I can do this alone would be a mistake. We are a team at Pro Farmer. Each week the pages of the newsletter are filled with contributions from our entire team — Chip, myself, Digital Managing Editor Julianne Johnston, Associate Editor Meghan Pedersen, LandOwner Editor Mike Walsten, Inputs Monitor Editor Davis Michaelsen, Washington Consultants Jim Wiesemeyer and Roger Bernard, and Technical Consultant Jim Wyckoff. I’ll also rely on you, our Members, to provide updates on crop conditions and other key issues that could help other Members with their farming business.

To our Members... I will always have an "open door" policy. If there’s something you don’t like that we’re doing or you disagree with, please let me know. I also encourage you to share what you like about what we are doing at Pro Farmer. Your honest critique about what we are doing — right or wrong — is how we get better. Please don’t hesitate to contact me. I cherish the opportunity to be your editor for many years to come.

That's it for now...

... have a great weekend!

Follow me on Twitter at @BGrete

To join Pro Farmer, click here!

Big changes at Pro Farmer and here comes Market Rally radio!

Feb 07, 2014

Hello Pro Farmer Members!

We've got some big changes coming at Pro Farmer! Since April of 1997, I've been responsible for the news pages in Pro Farmer newsletter and to help set the editorial tone of the news coverage in all of the Pro Farmer services. It has been unbelievably rewarding and humbling. And for much of that time, I've worked with Pro Farmer Sr. Market Analyst Brian Grete on the newsletter... he being responsible for the analysis and advice pages while I handled the news.

With a busy travel schedule for both of us, our On-line Managing Editor Julianne Johnston has covered for Brian as he covered for me on more than one occasion. Between Brian, Julianne and me, we've filled the pages of Pro Farmer newsletter. Of course, it takes more than the three of us to keep all the issues straight. LandOwner editor Mike Walsten is a regular contributor along with farm policy analysis from Associate Editor Meghan Petersen and Washington Consultants Jim Wiesemeyer and Roger Bernard. And most recently we're getting more coverage on input prices and trends from Inputs Monitor Editor Davis Michaelsen. As you can see, it's a team effort at Pro Farmer to provide the news, information and analysis you need to make smart risk-management, business and farm policy decisions. It's a responsibility we take very seriously.

And that team will remain in place, but there are some changes coming. Most important is Brian Grete will be your new Editor. Most of you know Brian and you know you can trust his news and analysis judgment. He knows what's important to you... he'll be a great Pro Farmer Editor.

But just because Brian will be your new editor, you're not getting rid of me! I'll still be a regular contributor to the newsletter and will chime in on risk-management advice, farm policy and the stuff that really matters to you. And I'll be branching out into the world of farm radio.

Starting March 10, Market Rally will be on the air! Market Rally is a brand-new 1-hour radio talk show that will focus on markets, markets and markets. (Did I mention we're going to talk markets?) It will air live starting at 2 p.m. Monday through Friday (some stations are planning to delay broadcast until later in the day). If you're in the Midwest, you'll most likely be able to listen to it live on one of the many farm radio stations. If you can't get it on the air, you'll be able to listen to the show on-demand on But listening live will give you the real value of the show.

You know how most market information is a one-way flow... it comes from wire services and analysts to you. Market Rally is going to change it up a bit. We'll start with a quick (very quick) recap of the day's action, including a live talk with a trader from the CME to get a feel from the floor. But you all know what happened today isn't nearly as important as what might happen tomorrow. That's what we'll be talking about with a guest analyst in the second segment of the show. We've already talked with some of the biggest names in farm market analysis about being on the show, and all of them are not only willing, but seem excited to be a part of the daily discussion. We'll rotate the views of analysts like Brian Grete, Arlan Sudderman, Dan Basse, Jerry Gulke, Kevin Van Trump, Mark Gold, Brian Bastings, Tommy Grassafi, Ken Morrison and Chris Barron (to name a few) on Market Rally. And over time, I'll work in some of the smartest minds in ag market analysis that you might not know... but after talking with them on-an-off for the last 26 years, I know they're good at what they do.

Here's where Market Rally will turn information into a two-way flow. Every day, we'll open up the phone lines, Twitter and e-mail to your questions and comments. Sometimes it will just be me taking questions and comments... but most of the analysts we've talked with are willing to stick around to take your questions and to respond to issues that you think are more important than what we've discussed on the show. I'll admit... this segment of the show is what I'm looking forward to the most. Talking with Pro Farmer Members is always what I've enjoyed the most... and now I get to do it every day.

And (of course) I can't help but to give a few of my own views on what's happening in the markets. The conversations we have with guest analysts won't be what you're used to seeing and hearing. If I don't agree with an analyst's view or opinion, I'll challenge them to convince me that I'm wrong and they're right. If you know me, you know I won't say I understand something if I don't. That's where confusion comes from. I hate confusion. By the time I'm done talking with guests, you'll understand exactly what they think of the markets.

Again, it has been an honor to be Pro Farmer Editor for nearly 17 years. But it's time to do something new... and Market Rally is exactly what I want to do.

And this means we'll bring some new blood onto the editorial team with new opinions and experiences to share with you! We don't know who that person will be yet, but we're looking for the right person to add some analytical horsepower to the team and to lead the risk-management advice we deliver to you. Obviously, it's an important role on the Pro Farmer team. We'll find the right person with the right goals - to help you make the best farm policy and business decisions you can make.

That's it for now...

... have a great weekend!

Follow me on Twitter at @ChipFlory

To join Pro Farmer, click here!

Log In or Sign Up to comment


The Home Page of Agriculture
© 2014 Farm Journal, Inc. All Rights Reserved|Web site design and development by|Site Map|Privacy Policy|Terms & Conditions