Evening Report (VIP) -- September 13, 2013

September 13, 2013 09:52 AM

OPPONENTS BUILD CASE ON CROP INSURANCE... Recent farm revenue is making funds spent on crop insurance supports "low-hanging fruit" for budget-cutters. Pro Farmer Washington Consultant Jim Wiesemeyer says, "Even crop insurance supporters on Capitol Hill tell me (privately) that crop insurance subsidies are too lofty."

Jim adds, "Opponents are building a case against the program. They say revenue protection policies have led to some crops being grown in areas where they couldn’t be without subsidized crop insurance; that the program favors Midwest and northern tier states; and that the program influences marketings by giving farmers ‘holding power’ to store grain."

Our bottom line is the crop insurance program works. That’s not to say it’s perfect, but it does work. The problem is opponents are threatening to swing a budget axe at the program. That’s not what it needs... or deserves. We examine opposition to the current crop insurance program at this link.



USDA'S REPORT DATA WAS BULLISH FOR BEANS, BEARISH FOR CORN. WHICH MARKET WILL WIN?... USDA’s September corn crop estimate not only came in much higher than traders expected, but it was also up from month-ago amid a record number of ears per acre. The bigger-than-anticipated corn crop estimate pushed projected 2013-14 carryover up from last month, despite a 58-million bu. cut to estimated old-crop ending stocks.

USDA’s September soybean crop estimate was right in line with the average pre-report guess. But projected new-crop carryover was slashed 70 million bu. from August and came in 10 million bu. less than traders expected.

So with the September Crop Production and Supply & Demand Reports out of the way, the outlook is much the same as it has been — bullish for soybeans and bearish for corn. The corn market is stuck trying to find a bullish catalyst that will help futures put in a low and spark sustained buying interest. The soybean market is trying to muster enough strength to push futures to new contract highs and spark fresh buying.

In all likelihood, near-term price action is likely to remain similar to what it has been with soybeans favoring a bullish bias and corn having a bearish lean amid the divergent attitudes. But with the new-crop soybean/corn price ratio already at 3:1, it seems unlikely the divergence between these two markets will greatly expand.

Will soybeans have enough strength to pull the corn market grudgingly higher or will the corn market weight soybeans down to the point where buyers become exhausted and futures tumble despite strong (and strengthening) fundamentals?



BIG WHEAT SEED SALES... Recent rains and a forecast calling for more precip in hard red winter wheat country are spurring strong wheat seed sales, according to sources in the region. Also, the price determination period for wheat revenue protection policies is wrapping up with an HRW price close to $7.00 and a SRW price of about $6.70. Both are well below levels seen the past two years, but probably still high enough to be considered "attractive" by wheat growers.

CASH CATTLE TRADE STEADY... Pro Farmer Digital Managing Editor Julianne Johnston reports on the cash cattle market and futures trade in this week's Cattle Market Wrapup for Farm Journal's Beef Today. Click here.



PROFIT BRIEFING ON AGDAY... Pro Farmer Editor Chip Flory and Senior Market Analyst Brian Grete discuss USDA's September Crop Production and Supply & Demand Reports in this week's Pro Farmer Profit Briefing clip on AgDay TV. Click here.


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