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April 2010 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.

Weekly USDA Crop Progress: 50% of corn already planted

Apr 27, 2010

Yesterday, the USDA released its weekly planting progress report. Progress in corn planting is still significantly above last year’s pace, with 31% of the crop being planted last week, 50% of the total corn crop is already in the ground for the 18 primary producing states. This compares to a 5 year historical average of 22% in similar time periods, and 2009’s estimate of 20%.

 

This week, the USDA included estimates of corn emergence. 7% of the 2010 crop has already emerged in the primary producing states, which is above both the 5 year historical average of 5% and the 2009 estimated of 2%.

 

The winter wheat crop is in better condition than last year at this time. Of the 2010 crop, 69% is still in excellent or good condition, compared to 45% one year ago. Still, only 6% of the crop is in poor or very poor condition. 14% of the winter wheat is headed, while 21% is the 5 year historical average this week.

 

Spring wheat planting has outpaced its 5 year historical average as well. Of the six primary producing states, 43% of the crop has been planted while only 27% is the historical average for the week.

 

Corn prices increased 1.4% over the past week ending at $3.52 per bushel and soybeans were up 2.2% to $9.98 per bushel. Year-over-year corn prices are down 5.7% and soybeans are off 0.7%.

 

Next week we will look forward to reporting USDA estimates of planted soybeans, along with the usual planting progress.

Remember to visit Farmland Forecast (farmlandforecast.colvin-co.com) for your daily update on news and research about agriculture and farmland.

Rural Mainstreet Report: Farmland Price Index at 18-month high

Apr 21, 2010
The overall Rural Mainstreet Index (RMI) decreased to 44.2 from its nearly two-year high of 47.4 last month, according to Creighton University’s April survey of bank CEOs in a 10-state region. The RMI currently sits below the growth neutral 50.0. The farm equipment sales index rose to an 18-month high of 57.2, and the farmland price index continued its rally to 59.5. The confidence index, which provides an economic outlook six months from now, decreased to 45.6, which is the first time it has fallen below 50.0 in the last six months, and the lowest it has been since August 2009. The home sales index increased to 52.5, which is above growth neutral for the first time since 2007.

The farmland price index increased to 59.5, continuing a four-month rally, currently at an 18-month high. The index has been above 50.0 for three straight months. Farmland sales have been bringing strong prices recently. Larry Rogers, executive vice president of First Bank in Utica, Nebraska reported one sale that brought $8,025 per acre for a 143-acre farm, according to the survey. All of the surveyed states had farmland price indexes above 50.0, while Missouri and North Dakota had the highest individual indexes of 63.5 and 63.9 respectfully.

 

The farm equipment sales index increased to a 19-month high this month to 57.2. Year-over-year, the index is up 27.6 points. “We are tracking significant improvements in farm and ranch land prices and farm equipment sales. I expect both of these factors to remain healthy in the months ahead,” said Creighton University economist Ernie Goss.



The home sales index broke above growth neutral for the first time since this month, reporting in at 52.5. “With the end of the tax credit for first-time home buyers on April 30, we are tracking upturns in home buying in the region,” said Goss.

 

This month, bank CEOs were asked if they would support the extension of a 45-cent-per-gallon blender credit for ethanol production beyond December 31. 82% of bankers were in support of the extension, while only 8% were opposed, according to the survey.

 

Outlook

 

Once again, the overall RMI proved that the rural economy is still volatile in certain spots. The farm equipment area sales index has been up and down at times, but it has had an overall upward trend over the past year. The farmland price index has been quite steady with its upward trend as well. Indexes like the confidence and home sales have been more volatile at times.

 

The rally of the farmland price index continues to support our bullish outlook on farmland values. As major investment sectors took a large hit in 2008, farmland values decreased minimally across much of the nation. For more details on our thesis on farmland, read “Why Invest in Farmland” (http://farmlandforecast.colvin-co.com/2009/02/12/why-invest-in-farmland.aspx).

Remember to visit Farmland Forecast (farmlandforecast.colvin-co.com) for your daily update on news and research about agriculture and farmland.

Weekly USDA Crop Progress: Corn and sugar beets well above historical marks

Apr 20, 2010

Yesterday, the USDA released its weekly planting progress report. Progress in corn planting is well above last year’s pace, with 16% of the crop being planted last week, 19% of the corn crop is already in the ground for the 18 primary producing states. This compares to a 5 year historical average of 9% in similar time periods, and 2009’s estimate of 5%.

 

The winter wheat crop is still in much better condition than last year at this time. Of the 2010 crop, 69% is in excellent or good condition, compared to 43% one year ago. In 2009, 27% of the winter wheat crop was in poor or very poor condition while only 6% is in such condition at this time in 2010.

 

Cotton planting progress is at 11%, which is steady with the 5 year average for the week. One third of the 2010 sugar beet crop is already in the ground while the 5 year average for sugar beet progress for this week is only 18%.

 

Prices in corn and wheat futures decreased on Monday. Corn prices decreased because of noncommercial selling, according to DTN, while wheat prices decreased due to speculation that the U.S. government fraud lawsuit against Goldman Sachs Group Inc. will decrease investment demand for riskier assets including commodities, according to Bloomberg. July wheat fell 23 cents on Monday while July corn dropped roughly 15 cents.

 

Next week we will look forward to reporting USDA estimates of emerged corn, along with the usual planting progress.

Remember to visit Farmland Forecast (farmlandforecast.colvin-co.com) for your daily update on news and research about agriculture and farmland.

WASDE: More corn and less wheat in the bins

Apr 12, 2010

The USDA updated the U.S. and World 2009/10 balance sheet estimates for major agricultural commodities in the World Agricultural Supply and Demand Estimates (WASDE) report on Friday. After the March WASDE and USDA Planting Report, grain prices have been very volatile. Traders were hoping for good news out of the April WASDE to help solidify grain prices. U.S. corn ending stocks increased slightly, within preliminary forecasts, and U.S. wheat ending stocks decreased 5% to mark below 1 billion bushels once again, according to the WASDE. 

 

U.S. corn ending stocks were increased 100 million bushels to 1.899 billion bushels. The increase in ending stocks was due to a decrease in feed and residual use, estimated by USDA. Although there was a record use corn for January ethanol production, ethanol usage remained unchanged because of lower gasoline usage in the U.S. The USDA narrowed its 2009/10 farm price for corn by 5 cents to $3.50 to $3.70 per bushel.

 

World corn production was increased by 2.0 million tons on an increase in production in Brazil and South Africa. The regions have seen favorable growing conditions.

 

Favorable planting conditions should exist over the next 10 days across much of the Corn Belt, allowing farmers to get an early start on planting corn. Temperatures should remain above their normal averages and precipitation should be held below normal averages this week, besides in the extreme northwest region of the Corn Belt. These conditions may affect upcoming USDA estimates and corn prices.

 

U.S. wheat ending stocks were decreased by 51 million bushels to 950 million bushels. The 5% decrease in ending stocks was due to higher domestic use and an increase in exports of 40 million bushels. Feed use of wheat increased as well. Wheat’s 2009/10 marketing year estimated price was narrowed by 5 cents by the USDA to $4.85 to $4.95.

 

World wheat supplies estimates remained unchanged in the report because of a small production increase that offset a decrease in ending stocks.

 

Estimated exports of U.S. soybeans increased by 25 million bushels. The increase puts U.S. soybean exports 13% above the 2008/09 record, even with an exceptional crop coming in South America. Soybean stocks remained unchanged in the U.S. while the farm price for the 2009/10 soybean crop was narrowed by 25 cents to $9.20 to $9.70 per bushel.

 

Worldwide Soybean production estimates were increased by 1.6 million tons to 257.5 million tons on late season favorable weather conditions in Argentina and Brazil.

 

The USDA increased corn ending stocks and decreased wheat ending stocks like many had been expecting. The decrease in wheat ending stocks to bring them back below 1 billion bushels was important for wheat prices. Soybean prices could strengthen on the positive news that exports had increased even with the good South American crop. We will look to planting reports as the 2010 planting season progresses.

 

Click on the link for the full WASDE report: http://www.usda.gov/oce/commodity/wasde.

Remember to visit Farmland Forecast (farmlandforecast.colvin-co.com) for your daily update on news and research about agriculture and farmland.

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