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October 2012 Archive for Farmland Forecast

RSS By: Marc Schober, AgWeb.com

Marc Schober is the editor of Farmland Forecast an educational blog devoted to investments in agriculture and farmland.

Crop Progress: Corn and Soybean Harvest Nearly Complete

Oct 31, 2012

Harvest is almost complete and farmers are working the fields for next year's crop. We anticipate the upcoming WASDE for yield estimates to determine the impact of the drought.

As of October 31, 2012 the U.S. has harvested 91% of the corn crop, compared to the five-year average of only 60%. Corn prices decreased by 0.8% over the past week ending at $7.55 per bushel and year-over-year prices have increased by 16.7%.
 
Soybean harvest is 87% complete, compared to 80% at the same time last year. Soybean prices increased by $0.01 over the past week ending at $15.47 per bushel and year-over-year prices increased by 28.2%.
 
Winter wheat planting has progressed to 88%, only 3% higher than the five-year average. 63% of the winter wheat has emerged, 1% behind last year at the same time. Wheat prices ended the week at $8.64 per bushel, a 1.6% decrease from last week. Year-over-year wheat prices have increased 37.6%.
 
For daily articles on farmland and agriculture, visit www.farmlandforecast.com 
 

Crop Progress: Only 13% of U.S. Corn Crop Left to Be Harvested

Oct 22, 2012

Favorable harvest weather across much of the Corn Belt has helped promote efficient harvest over the past week. To date in 2012, farmers have harvested 38% more corn than the five-year historical average.

As of October 22, 2012 the U.S. has harvested 87% of the corn crop, compared to the five-year average of only 49%. 11 of the 18 primary corn producing states are currently at over 90% harvested. Corn prices increased by 3.3% over the past week ending at $7.61 per bushel and year-over-year prices have increased by 17.3%.

The USDA estimated that 80% of all U.S. soybeans had been harvested as of the fourth week in October. The five-year average is only 69% of soybeans harvested. Soybean prices increased by 3.6% over the past week ending at $15.46 per bushel and year-over-year prices increased by 27.6%.

Winter wheat planting is still on pace with the five-year average at 81% complete this week. Emergence of winter wheat is slightly behind historical averages with 49% currently emerged compared to the five-year average of 56%. Wheat prices ended the week at $8.78 per bushel, a 3.5% increase from last week. Year-over-year wheat prices have increased 38.9%.

 

For daily articles on farmland and agriculture, visit www.farmlandforecast.com.

Farmland Price Index Climbs 16%

Oct 22, 2012

The Rural Mainstreet Index (RMI) increased to its highest level in four months. The farmland price index jumped 10.1 points and has now been above growth neutral for 33 straight months.

For the first time since June, the Rural Mainstreet Index is above growth neutral, posting a 56.6. According to Creighton University economist Ernie Goss, “Our survey indicates that the negative impacts of the drought are being more than offset by the positives of very strong incomes from high agriculture and energy prices.” 
Rural Mainstreet Index October 2012
Agriculture
The farmland price index has jumped almost 20 points in the last two months, posting a 71.7 this month. This marks the 33rd consecutive month the index has been above growth neutral. The farm equipment sales index increased to its highest level in five months to 60.5 vs. 50.0 last month.

Farmland Price Index October 2012

Bankers were asked this month to project whether the U.S. will suffer a recession in 2013. One fourth of bankers believed a recession is likely while 30.8% do not. Bankers expressed their uncertainty of the economic outlook due to the upcoming election and the fiscal cliff fast approaching.

Banking
The loan volume index decreased to 44.2 after increasing for seven months to a high of 70.2 in September. The check deposit index increased to 66.7 from 48.3 in September and the certificate of deposit and savings instruments increased to 42.0 from 38.4 in September. “The 2012 drought failed to increase the demand for loans from farming and nonfarming organizations in the region,” explained Goss.
September's hiring index increased slightly to 51.5 compared to 50.9 in September. The economic confidence index increased to 50.7 in October compared to 43.0 from last month. Ernie Goss said, “As the Rural Mainstreet economy turned upward for the month, so did bankers’ outlook.  The turnaround in the housing market is an important factor boosting economic confidence."
Survey
This survey represents an early snapshot of the economy of rural, agriculturally and energy-dependent portions of the nation. The RMI is a unique index covering 10 regional states, focusing on approximately 200 rural communities with an average population of 1,300. It gives the most current real-time analysis of the rural economy.

For daily articles on farmland and agriculture, visit www.farmlandforecast.com

Crop Progress: Over Three Fourths of U.S. Corn Harvested

Oct 15, 2012

Harvest progression for two key grains, corn and soybeans, are ahead of their five-year-averages. A combination of early planting and dry hot weather allowed farmers to get into their fields earlier this year.

As of October 15, 2012 the U.S. has harvested 79% of the corn crop, compared to the five-year average of only 38%. Corn prices decreased by 0.7% over the past week ending at $7.37 per bushel and year-over-year prices have increased by 15.2%.
 
Almost all, 96%, of this year's soybean crop have dropped leaves. Soybean harvest is off to a fast start with 71% already harvested, compared to only 64% at the same time last year. Soybean prices decreased by 3.8% over the past week ending at $14.92 per bushel and year-over-year prices increased by 19.1%.
 
Winter wheat planting has progressed to 71%, in line with the five-year-average of 71%. 36% of the winter wheat has emerged, behind the five-year-average of 44%. Wheat prices ended the week at $8.48 per bushel, a 1.5% decrease from last week. Year-over-year wheat prices have increased 35.9%.
 
For daily articles on farmland and agriculture, visit www.farmlandforecast.com 

WASDE: Corn Stocks Decline to Lowest Level since 1995

Oct 11, 2012

The USDA's October WASDE had some big changes, but was in line with analysts' expectations. Corn yields remained declined slightly, but 2011 stocks were cut drastically due to September’s stocks report and are now the lowest since 1995/96. Soybeans headed in a different direction as yields were increased by 2.5 bushels and with that came increases in almost every category except price. Prices estimates dropped for all three grains.

Corn

The average corn yield in the U.S. was 122.0 bushels per acre, only a 0.8 bushel decrease from last month. Decreased yields in Illinois were only partly offset by increased yields in North Dakota and Minnesota. U.S. 2012/13 corn production was forecasted down 21 million bushels due to decreased yields.
 
A 100 million bushel reduction in U.S. exports for 2012/13 was a result of the slow pace of sales and competition from Brazil. Corn season-average farm price has been lowered $0.10 on both ends of the range to $7.10-$8.50 per bushel.
 
Due to the September 1 stocks report, U.S. beginning stocks for 2012/13 were decreased by 193 million bushels. Ending U.S. corn stocks for 2012/13 were estimated at 619 million bushels, a 114 million bushel decrease from September.
 
Global coarse grain supplies in 2012/13 were estimated to decrease 4.0 million tons, mostly due to the reduction prospects for EU-27, Serbia, Canada, and the United States. Global 2012/13 corn exports were also lowered by 1.8 million tons, with the largest reduction coming from the United States.
 
Soybeans

2012/13 U.S. soybean production has been projected up 226 million bushels to 2.860 billion bushels due to increases in planted area and yields. Average soybean yield was projected at 37.8 bushels per acre, 2.5 bushels above last month's projection.        
 
Exports for 2012/13 were increased by 210 million bushels to 1.265 billion bushels due to increased pace of exports, increased supplies, and lower prices. U.S. 2012/13 ending stocks were increased by 15 million bushels to 130 million bushels. The 2012/13 average soybean price was lowered by $0.75 on both ends of the range to $14.25 to $16.25 per bushel.

Wheat
 
2012/13 U.S. wheat ending stocks was decreased by 44 million bushels to 654 million, due to higher feed and residual disappearance. Due to the latest Small Grains report, 2012/13 U.S. wheat production was raised by 1 million bushels.
 
Slower shipment pace and stronger than expected competition lowered 2012/13 wheat exports by 50 million bushels. The season average wheat price for 2012/13 was projected lower to $7.65 to $8.55 per bushel.
 
Global 2012/13 wheat exports were lowered 4.0 million tons mainly due to reductions in Australia, U.S., EU-27, and Canada.

Outlook
 
Harvest has taken center stage and we look forward to more yield data as almost three-fourths of the U.S. corn crop has been harvested. We will be keeping a close eye on a variety of issues as many questions still remain unanswered that effect the agriculture sector i.e. Farm Bill, Renewable Fuel Standard, Presidential Election, and Fiscal Cliff, resulting in an uncertain end to the 2012 year.
 
For daily articles on farmland and agriculture, visit www.farmlandforecast.com 

Crop Progress: U.S. Corn Harvest 69% Complete

Oct 09, 2012

The 2012 U.S. corn harvest might be done and in the books by the end of October. Farmers took advantage of early planting and dry weather to accelerate the 2012 harvest.

As of October 9, 2012 the U.S. has harvested 69% of the corn crop, compared to the five-year average of only 28%. Almost all the U.S. corn has matured, 97%, outpacing the five-year average of 84%. Corn prices decreased by 1.9% over the past week ending at $7.42 per bushel and year-over-year prices have increased by 22.6%.
 
Soybean conditions were at 32% in very poor or poor condition compared to 16% a year earlier. Soybeans in good or excellent condition were at 37%, a 19% decline from one year prior. 93% of this year's soybean crop have already dropped leaves, only 86% had dropped their leaves at the same time last year. Soybean prices decreased by 0.6% over the past week ending at $15.50 per bushel and year-over-year prices increased by 31.7%.
 
Winter wheat planting has progressed to 57% planted in the U.S., compared to the five-year average of 59%. 23% of the winter wheat has already emerged, in line with last year at this time, 24%. Wheat prices ended the week at $8.64 per bushel, a 2.3% decrease from last week. Year-over-year wheat prices have increased 41.4%.
 
For daily articles on farmland and agriculture, visit www.farmlandforecast.com 
 
 

Crop Progress: Over Half of U.S. Corn Harvested

Oct 01, 2012

Harvesting of corn and soybeans continued to press on as over half of the U.S. corn has been harvested. We look forward to definite yield data to determine how hard the drought has affected yield performance.

As of October 1, 2012 the USDA estimated that 25% of the corn crop was in good or excellent condition, a 27% decline from last year; 50% of corn was in very poor or poor condition compared to 20% a year ago. Harvest continued to outpace historical data as 54% of the U.S. corn crop has been harvested, compared to the five-year average of only 20%. 94% of the corn crop was mature, outpacing the five-year average of 72%. Corn prices increased by 1.6% over the past week ending at $7.56 per bushel and year-over-year prices have increased by 27.7%.
 
Soybean conditions were at 33% in very poor or poor condition compared to 17% a year earlier. Soybeans in good or excellent condition were at 35%, a 19% decline from one year prior. 85% of this year's soybean crop have already dropped leaves, only 71% had dropped their leaves at the same time last year. Soybean prices decreased by 3.1% over the past week ending at $15.60 per bushel and year-over-year prices increased by 32.5%.
 
Winter wheat planting has progressed with 40% planted, compared to 36% last year. Wheat prices ended the week at $8.84 per bushel, a 0.9% decrease from last week. Year-over-year wheat prices have increased 42.8%.
 
For daily articles on farmland and agriculture, visit www.farmlandforecast.com  

Soybean Yields Drive Market Lower

Oct 01, 2012

The U.S. fall harvest is well ahead of schedule and higher than expected soybean yield data has pushed grain prices lower throughout the month. Farmers are also busy preparing for the 2013 crop year by purchasing seed and other inputs early, while also strategizing the marketing of their 2013/14 grain. The U.S. drought has put pressure on seed corn producers. There shouldn't be a shortage of seed corn in 2013, but certain varieties will surely sell out earlier than anticipated.

Grain Prices

Corn prices declined this month by 6.1% to end at $7.56 per bushel. Profit taking by speculators along with a stronger dollar and spillover from soybean market activity all helped add downward pressure to corn prices this month. The USDA estimated the average U.S. corn yield 0.8 bushels lower to 122.8 bushels per acre in this month's WASDE Report. Additionally, the USDA discovered 160 million bushels of old crop corn which sent stocks up 83 million bushels to 733 million bushels.

Soybean prices decreased this month to close at $16.01 per bushel, a 10.2% decline. The USDA estimated average yields lower by 2.2% to 35.3 bushels per acre in the September WASDE Report, but farmer yield data from harvest consistently outperformed and prices declined throughout the month. Fund profit taking and decreased commercial demand also sent prices lower.

Wheat prices increased by 3.7% this month, closing at $9.02 per bushel due to a potential export limit in Russia and below average winter wheat expectations in the U.S. In the September WASDE Report, the USDA did not change the wheat balance sheet in the U.S., but decreased global production by 3.1 million tons due to decreased yields in Russia. We will closely monitor the U.S. winter wheat crop condition throughout the next few months.

Farmland Values

Buying season is upon us and many farmland sales have set county records already this fall across the Corn Belt. Farmland values should continue to increase throughout the end of 2012 and into 2013 as high commodity prices, low interest rates, and high farmer demand for farmland will all be key factors in rising farmland values.

The Creighton University farmland price index, which has been declining for three straight months, got a jump start this month and climbed almost ten points to 61.6 compared to 52.8 in August. This marks the 32nd consecutive month the index has been above growth neutral. The farm equipment sales index increased to an even growth neutral, 50.0, an enormous increase from the 38.3 it posted last month.

Bankers were asked this month to project farmland price growth in the next 12 months. Answers varied, but on average, bankers believe there will be a three percent gain in farmland prices in the upcoming year.

Quarterly Stocks

Corn stocks bullishly dropped below one billion bushels, the lowest level in eight years, in the USDA's release of the Quarterly Grain Stocks report last Friday. Soybeans came in within the expected range and wheat had a slightly bullish tone as stocks fell below estimates. Overall, this report gave a jolt to corn and wheat to the upside, which is surprising as most analysts predicted a neutral tone.

USDA reported 988 million bushels of corn currently on hand, a decrease of 14% year over year. Soybean stocks decrease by 21% to 169 million bushels compared to 2011. Wheat stocks were reported 2% lower than on September 30, 2011 with 2.10 billion bushels currently in stocks in the U.S.

Crop Progress and Conditions

As of September 23, 2012 USDA estimated corn conditions remained unchanged with 24% of the crop in good or excellent condition, yet a 28% decline from last year at the same time. Harvest advanced week over week with 39% of the entire U.S. corn crop harvested compared to 26% the week prior and the five year average of only 13%.

Soybean conditions were at 34% in very poor or poor condition and 35% in good or excellent compared to 36% and 33% respectfully one week earlier. As of the fourth week in September, 22% of U.S. soybeans have already been harvested compared to the five year average of only 8%.

Outlook

Some analysts are already forecasting upwards of 100 million acres of corn to be planted in the U.S. in 2013 which would be the highest amount of corn acres since the 1930s. If indeed 100 million acres of corn are planted, grain prices will reflect the increase in potential supply after 2012's massive drought. The insatiable demand from China, Japan, and other countries will help provide a perceived price floor for grains until 2013 planting, and expect buyers to take advantage of any lowering prices.

The Farm Bill is set to expire at the end of 2012 and without any extension, although highly unlikely, all farm subsidies will be halted which includes crop insurance and food stamps. We expect an extension to be in place by year end with terms in line with the current Farm Bill.

 

For daily articles on farmland and agriculture, visit www.farmlandforecast.com 

 

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