Wheat producers: Increase 2014-crop cash sales… Wheat futures continue to roll over and are flashing technical sell signals despite deteriorating winter wheat crop conditions. That suggests traders are convinced the premium they built into the market on the runup from the winter lows was more than enough. Those attitudes can change, but there's risk of more near-term price pressure. We advised wheat hedgers to sell another 25% of expected 2014-crop production to get to 75% forward priced on expected production. We advised cash-only marketers to sell another 10% of expected new-crop production to get to 60% sold.
NOAA: Chance of El Nino by summer increasing... The National Oceanic and Atmospheric Administration (NOAA) says while ENSO-neutral conditions continued during March, above-normal sea surface temperatures (SSTs) are developing over much of the eastern tropical Pacific as well as near the International Date Line. In addition to other indicators, NOAA says "they all reflect a clear evolution toward an El Nino state."
Forecasters we interviewed in late March were in agreement the timing of the El Nino event is critical for the summer weather pattern as it relates to Midwest crop yields. But World Weather, Inc. Meteorologist Drew Lerner says he expects to see El Nino-like conditions in May and June if the trend toward El Nino continues and the event is officially declared later in the summer. El Nino is known as a "friend of the Midwest farmer," reminds Iowa State University Climatologist Elwynn Taylor, as El Nino years increase the odds of trendline to above-trendline Midwest yields. Related news.
Next Thursday, NOAA's Climate Prediction Center will release its extended weather outlooks for May through July, which incorporate NOAA's ENSO outlook.
Drought Monitor reflects slight contraction... For the contiguous 48 states, the U.S. Drought Monitor showed 37.98% of the area in moderate drought or worse, compared with 38.37% a week earlier. Minor improvements in the eastern half of the U.S. prompted the reduction in the percentage reported in drought this week with almost no drought areas reported east of the Mississippi. However, further drought expansion was noted across southeast Nebraska, southern South Dakota, as well as the panhandle area of Oklahoma/Texas. Click here for more.
Ag attaché expects smaller Argentine corn crop in 2014-15... The U.S. ag attaché in Argentina projects the nation's planted corn area for 2014-15 will decline marginally to 3.2 million hectares for a crop of 22.0 MMT. However, the report notes, "Under the current uncertain environment, producers delay their planting decisions to the last minute." Argentina's 2014-15 wheat crop is expected to increase to 12 MMT as most expect wheat acreage to expand to around 4.2 million hectares.
Canadian firms to increase grain handling capacity... The grain shipping fiasco in Canada this year has caused three firms to increase their ability to handle Canadian grain. Cargill plans to expand an elevator site in Manitoba, while CWB, formerly the Canadian Wheat Board, said it is building a second Western Canadian grain elevator. And Viterra will spend C$100 million ($92 million) to boost grain shipping through Port Metro Vancouver.
Large Indiana farmland auction uncovers strong demand… Through all the talk of a correction in farmland values, demand for farmland has held stable to strong in Indiana and Ohio. And, as LandOwner Editor Mike Walsten has been telling subscribers, investors are looking at the current talk of a correction as an opportunity to purchase high-quality land while farmer demand cools. That was the case at an auction Tuesday in Indiana.
The offering featured 833 acres west of Muncie. It featured 557 contiguous acres in western Delaware County and 276 acres in eastern Madison County. The soils carried corn productivity ratings ranging from 140 to 160.
The auction was conducted by Schrader Real Estate and Auction Co., Inc., Columbia City, Ind., and was offered for bidding in 15 tracts. About 150 people attended the auction, but the main competition came down to a single investor, the owner of a large trucking company, versus a group of five bidders for the entire property. The trucking company owner purchased the property for $7,900,000 or about $9,482 per acre.