From The Editor
Jan. 18, 2013
Hello Pro Farmer Members!
The January issue of Pro Farmer's Crop Tour newsletter is available on the website now. It includes the latest on South American crop conditions, conflicting signals regarding El Nino and La Nina and the short- and long-term outlooks for U.S. weather that (believe it or not) lead us right up to the 2013 Midwest corn-planting season! You can click here to view the January Crop Tour newsletter.
Our Profit Briefing Seminar schedule has wrapped up, but that doesn't mean the winter meeting schedule is over! Next week, I'll be talking with friends at the Bremer Co., IA, Corn and Soybean Growers Association meeting and I'll be traveling to AgConnect in Kansas City as well as the Top Producer Seminar in Chicago at the end of the month. And, of course, I'll be at the Commodity Classic at the end of February with several other events to attend between now and then.
Cattle got hammered this week -- the market frankly (and frustratingly) didn't even give most a chance to establish hedges before tanking. Tight supplies and negative packer margins forced a plant to close and shifted a higher percentage of the industry's capacity to the north. Which makes sense... the cattle moved north due to the ongoing drought and the slaughter capacity is following. I realize it's not that simple, but if you break it down to the simplest terms, that's what's happening. The market responded with hefty selling pressure. I believe it's creating a buying opportunity in feeders - tight supplies should dry up selling in futures sometime in the week ahead.
Probably the biggest concern in farm country right now is the ongoing drought in the western Corn Belt and the potential for another tough growing season. That's keeping most farmers from selling much 2013-crop corn and soybeans for now, and I agree. Until we see cropping conditions improve, we can plant the 99.3 million projected by Informa Economics and still not produce enough corn to rebuild our starved demand base.
And demand is down... ethanol production is slowing and exports stink. But the feed side of the equation must still be going strong for corn. If it wasn't, Dec. 1, 2012, corn stocks would have been at least 200 million bu. heavier than reported. Finished cattle weights are up from year-ago and hog numbers are holding up while poultry production surprisingly keeps chugging along. This has us thinking we're starting to build up some pent-up demand for corn. Because we can't service that demand due to tight stocks this year, it could mean a bigger-than-expected demand surge in the 2013-14 marketing year. The potential for a demand surge when corn-starved buyers come to the market should also add a floor of support under new-crop corn futures.
If you haven't checked out My Grain Trades on your homepage yet, please do that this weekend. This is an exceptionally valuable tool that will help simplify your marketing efforts in the year ahead. Click here to go to the introductory page. It's a free service for Pro Farmer Members that helps you keep track of your grain sales and figures your profit potential on the fly. Just check it out...
Pro Farmer's Marketing Education Series is also now available. It is what the title suggests... a series of workbooks designed to help you make better marketing decisions. Click on the link to learn more about this new project we're putting together.
That's it for now...
... have a great weekend! Everyone at Pro Farmer will be celebrating Christmas and the New Year with our company get-together this weekend. We're going to grill some steaks and also celebrate 20 years of service to the Pro Farmer Membership by Member Relations Manager Shelley Eilderts and News Editor Julianne Johnston! Congratulations ladies -- your service to Members is greatly appreciated and it's been a joy to work with you for the last 20 years!
And by the way... 25 years ago today I started on the floor of the Chicago Board of Trade as a reporter for Commodity World News... which transformed into Futures World News... which morphed into Bridge News... and finally ended up as Dow Jones newswire. The week I started, front-month corn futures traded in a range of $1.91 1/2 to $1.99 and I was told to write a "market special" if corn posted an intraday rally of A PENNY or more. My... how times have changed!
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