Aug 21, 2014
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RSS By: Kevin Van Trump, AgWeb.com

Kevin Van Trump has over 20 years of experience in the grain and livestock industry.

Crop Tour Points to Higher Yields?

Aug 21, 2014

Results Pro Farmer Midwest Crop Tour:  Day #3 of the Tour came to an end with scouts giving us a look at Western Iowa and the final Illinois numbers. Both corn yields and soybean pod counts for Illinois and Western Iowa were better than last year and much better than their 3-year average. Today, crop scouts will dive into the remainder Iowa and Minnesota.  Then this evening participants from both the Eastern and Western leg of the tour will come together in Rochester, Minnesota to give us their final overall estimates. Remember, as I mentioned before the tour started, Day #4 (today) could bring a bit of disappointment, especially as the crop scouts work their way further north.  I try no to get caught up in the short-term day-to-day movements of the market, but as the tweets and social media roll across the screen, theres a chance we could see a bit of a short-covering rally.                           CLICK HERE for my daily report...    

Western Iowa (Wednesday) - 3 districts surveyed yesterday the rest of the state today. Corn: District 1 - 177.48 vs 175.6 bpa last year vs. 3-year avg. of 170.72;  District 4 - 180.06 vs. 170 bpa last year vs. 3-year avg. of 162.06;  District 7 - 180.90 vs. 160.12 bpa last year vs. 3-year avg. of 146.77.  Soybean pod counts by district: District 1 - 1091.34 vs. 802.98 last year vs. 3-year avg. of 962.06; District 4 1124.96 vs. 849.79 last year vs. 3-year avg. of 1045.65;  District 7 - 1166.21 vs. 1101.49 last year vs. 3-year avg. of 1091.22. 

Illinois (Wednesday) corn yield reported at 196.96 bpa vs. the 170.48 bpa estimate last year  vs. the 3-year average of 149.36 bpa. Soybeans showed a pod count in a 3’-by-3’ square of 1,299.17 vs. the 3-year average of 1,085.35 and last years estimate of just 1,115.97.

Nebraska (Tuesday) corn yield reported at 163.77 bpa vs. 154.93 bpa last year  vs. 3-year average of 146.81 bpa. Soybeans showed a pod count in a 3’-by-3’ square of 1,103.36 vs 1,138.94 last year vs. the 3-year average of 1,106.62.

Indiana (Tuesday) corn yield reported at 185.03 bpa vs. 167.36 bpa last year vs. 3-year average of 141.24 bpa. Soybeans showed a pod count in a 3’-by-3’ square of 1,220.79 vs. 1,185.14 last year vs. the 3-year average of 1,118.65. 

Ohio (Monday) corn yield estimated at 182.11 bpa vs. 171.64 bpa last year vs. the 3-year average of 146.43 bpa.  Soybean count at 1,342.24 pods in 3’-by-3’ square vs. 1,283.61 last year vs. the 3-year average of 1190.18 pods.

South Dakota (Monday) corn yield reported at 152.71 bpa vs. 161.75 bpa last year vs. 3-year average of 125.70. Soybeans count at 1057.8 in a 3’-by-3’ square vs. 1,016.68 last year vs. the 3-year average is at 902.76.  CLICK HERE for my daily report...

 

Is the Corn Market Ready for a Breakout?

Aug 20, 2014

Corn market remains on hold as traders wait for a better look and more confirmation in regard to the US crop.  Keep in mind, new-crop DEC14 corn has essentially traded sideways for the past month between $3.60 and $3.80 per bushel. From a "technical" perspective you have to imagine a close below the $3.58 bring about more bearish interest and prompts some of the longer-term bulls to throw in the towel.  While a close back above the $3.81 level will bring some new bullish interest and additional short covering. As congested as the market has been as of late, I'm starting to think a breakout in either direction may be enough to push the market for an extended period of time. In other words a close below $3.58 could prompt the market to quickly tumble another $0.50 cents.  From a risk-management perspective this is what we are trying to avoid. On the "demand" side of the equation things still remain strong, in fact corn is now the cheapest it's been in relation to ethanol since 2007. Bottom-line, demand is not the issue right now, the trade is clearly focused on supply, specifically total US production. I'm afraid if the trade can somehow confirm a US corn yield north of 172 (like many analyst are projecting) prices may eventually test the $3.00 level. As producers we have to make certain we are prepared for such a move.                       CLICK  HERE for my daily report....             

China Seeing More Rain: We have all seen the recent headlines regarding one the worst droughts in years for parts of the Northern China Plain's.  The latest forecasts are now calling for 2.0 to 2.5 inches of rain by next week for key areas of Jilin and Liaoning.  Bottom-line, I'm still not seeing a major reason to worry about Chinese production.  They might end their run of 11 straight years with NEW record corn production, but I'm thinking it will still be extremely large. Keep in mind, cash corn in their country is still trading north of $9.50 per bushel.

Latest Thoughts on Pro Farmer Midwest Crop Tour!

Aug 19, 2014

UPDATED Thoughts on 2014 Pro Farmer Midwest Crop Tour: Crop scouts took to the field today. The Eastern leg got started in Ohio, moving towards Indiana, while the Western leg of the tour started in South Dakota and worked its way into Nebraska. As expected, the first day brought along many variables... some fields were much drier than many had thought they would be, especially out east. In addition some fields were nitrogen deprived due to heavy amounts of June moisture. I heard out west some scouts found their way into fields that had seen some fairly significant storm damage, hail, high winds, etc... There is also a bit more talk than normal about various disease issues in the fields. I'm assuming this is due to the moisture levels and cooler than normal temps. As expected though, most early reports brought attention to a few dry pockets, a crop that appears to be behind pace and a soybean crop that needs good finishing weather out into Sept.  Bottom-line, OH yields were better than last year for both corn and soybeans, while SD yields were almost -6% lower for corn, but about +4% higher in soybeans.  Details from the first day of data are below. I suspecttomorrow and Wed scouts will find some massive yielding fields...hold on to your hat! CLICK HERE for my daily report...   

 

  • Ohio corn yield estimated at 182.11 bpa vs. 171.64 bpa last year vs. the 3-year average of 146.43 bpa.  Soybean count at 1,342.24 pods in 3x3 square vs. 1,283.61 last year vs. the 3-year average of 1190.18 pods.   
  • South Dakota corn yield reported at 152.71 bpa vs. 161.75 bpa last year vs. 3-year average of 125.70. Soybeans count at 1057.8 in a 3’x3’ square vs. 1,016.68 last year vs. the 3-year average is at 902.76. 

Bean Prices Higher on Weather Uncertainty...

Aug 18, 2014

Soybean production obviously remains a major "wild-card" for many inside the trade, especially since we are only at mid-August. We all know the weather could still play a major part in final production numbers. My question is  how much longer will the trade buy into this rhetoric? You have to believe as each day and week passes, with unbelievable temps and adequate rainfall, the US crop is getting bigger NOT smaller.  The trade also has to soon start paying more attention and becoming more concerned about longer-term price risk associated with increasing acreage both in South America and here at home next year.  We are already digesting news and data that indicate Brazil is going to plant an additional 5-6% in soybeans. Meaning yet another new record planted soybean crop in Brazil.  Keep in mind they start planting in just a few short weeks.               CLICK HERE for my daily report....

Our Perspective on Next Weeks Crop Tour...

Aug 15, 2014

A Deeper Look Inside The 2014 Pro Farmer Midwest Crop Tour: Our good friends over at Pro Farmer are going to be kicking off their highly anticipated and heavily monitored "2014 Midwest Crop Tour" this next week. Our buddy Chip Flory will be heading up the Western leg of the tour and Brian Grete will be leading the Eastern leg of the tour. Since social media has become such a driving force in the market, I felt it was important to play this out a bit. Below are my thoughts and a few inside details:

 
My Thoughts Regarding "The Western Leg of the Tour"
 
Sunday participants gather in Sioux Falls, SD to begin the tour. 
Day #1 - Monday the tour heads from Sioux Falls, SD southwest to Grand Island, NE. I'm thinking the tour won't start far enough east to see much of the major flooding and won't go far enough west to see much of the hail damage on Day #1. This might leave the bulls a bit disappointed as the Tour tweets about record yields in various locations. The nightly meeting will be held at Grand Island, NE Riverside Golf Club, 2820 Riverside Dr. Grand Island, NE 6880
Day #2 - Tuesday the tour heads from Grand Island, NE southeast to Nebraska City, NE. I'm thinking this might end up being the most promising leg of the Western tour, not far enough north to see the hail and storm damage, and not far enough west to see the non-irrigated dry land problems. Hence, there could be some mammoth irrigated yield numbers being tweeted and talked about. The nightly meeting will be held at Arbor Day Farm/Lied Conf. Ctr 2700 Sylvan Rd Nebraska, City, NE 68410
Day #3 - Wednesday the tour heads from Nebraska City, NE northeast to Spencer, IA - This part of the tour could go either way just depending on the various samplings. You could start to see some flood, high wind and hail damage in NE and once you get up towards Spencer, IA there might be some disappointment as well. There are some areas up in northwestern IA that have taken a bit off the top-end because of conditions being a little dry. My point is, some folks might be looking for huge record yields during this leg of the tour, but I bet when you add it all up its not overly impressive. Could be some disappointment. The nightly meeting will be held at Clay County Events Ctr, 800 West 18th St. Spencer, IA 51301
Final Day #4 - Thursday the tour heads from Spencer, IA northeast to Rochester, MN - I'm thinking the crop is going to look fairly good but well behind schedule. There are some talks many parts of MN might not see corn black layer until early to mid-Oct. The problem with that is they generally tend to see a freeze by mid to late-Sept. Might cap the top-end. The nightly meeting will be held at Rochester Event Center, 7333 Airport View Dr. SW Rochester, MN 55902                               CLICK HERE for my daily report..... 
Putting it ALL Together... From where I sit, Day #2 (Tuesday) and perhaps early in Day #3 (Wednesday) look as if they could provide the trade with the most dangerous bearish headlines. The beginning of Day #1 and the majority of the Final Day #4 (as the tour moves from IA into MN) may end up being a bit of a disappoint. This final leg this years might show some extreme variability amongst fields, but overall one that is MUCH later developing (some areas 30-days behind). Remember the Western Leg will be in NW Iowa during the second half of Day # 3 and the first part of Day #4. This is where producers got a ton of rain in June then the spigot shutoff until just recently. This means the fields where producers put ALL the nitrogen on before the corn came up are going to be much worse than the fields where producers waited to apply half the nitrogen after the corn came up. Similar type story for Day #4 on the Eastern Leg of the Tour. My hunch is they see more extreme variability as some areas in NE Iowa have been much drier than normal. My fear is that tour participants, after rolling out of the bin busting areas during Day #2 and parts of Day #3, may feel a bit of a let down or disappointment into the final home stretch. If these assumptions are correct, you might see the market pressured as we digest the big social media data Day #2 and into Day #3, then bounce a bit after the final numbers are released and some of the shorts decide to cover. In fact, if we get some major downside pressure I might even start peeling off a few of our longer-term hedges that we have been parked in for downside protection. Bottom-line, I'm still thinking a national yield right around 170 makes the most sense. The guys who are talking 175 plus still seem a bit too high for me. My contention is to get the US average yield at or north of 175, you will need to see the #1 corn producing state of Iowa averaging closer to 200 bushels per acre. Right now the USDA has them pegged about right at around 185-187 bushels per acre, which I believe is close. There are some areas that could struggle moving forward without a steady stream of additional moisture. In fact I see no way the areas in NE Iowa will harvest the record yields they recorded last year. Hence I'm not thinking Iowa really blows it out of the water. The state of Illinois is obviously very good right now (especially in Central Illinois), but since the state runs more north to south there is a much larger variable in soil types and conditions. My fear is some of the southern areas are not having the same bin busting record crops like the guys in the central part of the state. There are also a few other pocket areas that the Tour won't be getting into that are less than ideal. Moral of the story, yes the USDA may still need to push yields higher, but I'm not so sure we get much over 170 once the dust settles and the smoke clears. In fact I'm starting to think we are going to need really good finishing weather to pull of the 170-172 type yield that so many are currently trading. Any wrinkles in the sheets and I'm thinking the yield is less. Does this mean we have reached a bottom in price? I doubt it, but it does mean we might be close to hearing or seeing the highest yield estimates of the season already revealed. *If you plan on attending the nightly meetings, just remember the reception generally starts around5:30pm; Dinner at around 6:30pm; and the Tour presentations will start around7:15pm (hoping to end around 9:00pm).  CLICK HERE for my daily report....
 
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