Run Those Planters Ragged

Published on: 15:22PM Jun 28, 2013


Market Watch with Alan Brugler

June 28, 2013

Run Those Planters Ragged 

It was a wet spring, with planting running behind for corn, soybeans, spring wheat and even cotton. Some Iowa producers were still taking a chance on soybeans this week. You sure couldn’t tell that there were planting issues from the USDA Planted Acreage report. Corn acreage was above intentions at 97.379 million acres, soybeans were above intentions at 77.728 million, and cotton was above intentions at 10.3 million. Spring wheat lost some ground to corn and beans, at 12.3 million vs. 12.7 million in the March Intentions report.  Overall, it looks like upgraded equipment did allow producers to do more with fewer suitable field days, running those planters ragged to use an old expression.  There are still legitimate questions about final acreage, since "intended to be planted" on June 5 might not have actually been planted. Only the FSA data in September (and the cleaned up version incorporated into the NASS production estimate in October) will clear up the issue. In case you were wondering, here is the official NASS policy on planted acreage revisions:

Revision policy: Estimates of planted acres for spring planted crops are subject to revision in the August Crop Production report if conditions altered the planting intentions since the mid-year survey. Planted acres may also be revised for cotton, peanuts, and rice in the September Crop Production report each year; spring wheat, Durum wheat, barley, and oats only in the Small Grains Annual report at the end of September; and all other spring planted crops in the October Crop Production report. Revisions to planted acres will only be made when either special survey data, administrative data, such as Farm Service Agency program "sign up" data, or remote sensing data are available. Harvested acres may be revised any time a production forecast is made if there is strong evidence that the intended harvested area has changed since the last forecast.

Corn futures continued its bullish ways, up 18 cents per bushel in the July contract after gaining 7 cents the week before. Such was not the case for December futures, which lost 45 ¼ cents for the week.  The main news for the week was out on Friday morning. USDA showed a bullish old crop stocks number of 2.764 billion bushels. Western Corn Belt stocks on June 1 were the tightest since 1996, also the case for Eastern Corn Belt (OH, IN,IL) states. This should be supportive to old crop cash prices, with basis doing most of the work. At some point in July or early August, end users typically decide they have enough to last until harvest and then the flat price will break. New crop news was bearish, with a shocking corn acreage number of 97.379 million. See our acreage comments back on the first paragraph.

Nearby July Soybeans gained 71 cents per bushel this week. Old crop stocks are tight, and the shorts remember the delivery squeeze in May. They are buying their way out. There are currently no bushels registered for delivery against July. USDA confirmed the tightness in old crop supplies, showing June 1 stocks at 435 million bushels. A $42.60/ton jump in July meal futures (and the cash meal behind that) supported product value. November lost 21 ½ cents for the week, all of it on Friday. USDA showed planted acreage of 77.728 million. That was smaller than the average trade estimate, but still larger than the March intentions. It also implies record double crop acreage, with the lower average yield expected on those acres.















% Change










CBOT Wheat








KCBT Wheat








MGEX Wheat
















Soybean Meal








Soybean Oil








Live Cattle








Feeder Cattle








Lean Hogs
































Wheat futures were down hard in Chicago and KC this week, with less damage in MPLS. Chicago lost 7.1%, and KC July was down 8.2% on harvest pressure. Hedge selling on the close was a problem all week, and speculative buying interest was non-existent in the face of glowing SRW yield reports and a much larger Black Sea export program expected for 2013/14. USDA put All Wheat plantings at 56.503 million, which is above the 56.44 million from the March surveys. The drop in Other Spring wheat was smaller than expected, roughly the 3% of the crop not yet planted. FSA data will be used to determine if adjustments are needed.

Cotton ran into major resistance two weeks ago, and continued to sell off this week. July was down 3.06% for the week. The USDA showed 10.251 million acres planted, up from the March intentions but still down from 12.314 million last year. US weekly export sales were the slowest of the year for old crop. The US dollar index rallied all week, and won’t help boost those exports much. The higher stock market might help consumer confidence a bit. Total Commitments YTD are now 101% of the revised USDA forecast for the year. That now lags the 109% average pace over the past 5 years.

Cattle futures were 43 cents higher this week, a second up week in a row. Choice beef prices are reverting to the mean after their record levels in May. Wholesale beef prices were mixed this past week, with Choice down 0.9% and Select up 0.5% on a Friday/Friday basis. Cash cattle trade was slow to develop on Friday, with modest volume reported at $121. US beef production YTD is 0.9% smaller than last year. Weekly slaughter was down 0.6% vs. 2012. Estimated carcass weight is 4# below last year’s actual of 794#.

Hog futures were up $1.53 for the week, a continuation of the multi-month rally. Weekly export sales were the largest since the first report was issued back in March, at 18,600 MT. Estimated weekly slaughter was 2.018 million head. That was up 1.9% from the previous week and 0.6% larger than last year. Weekly pork production was up 1.8% from the prior week. Pork production YTD is 0.7% below last year at this time.  The pork carcass cutout value was up 1.83% for the week, with hams up 6.8%. The Hogs & Pigs report on Friday afternoon showed 100% of the hogs we had a year ago. Market hog numbers were 99.9% of year ago. Mar-May farrowings were smaller than expected at 98% of year ago, but Kept for Breeding was larger than the average trade guess at 100.3%. 

 Market Watch

This will be one of those "interrupted" weeks, with the July 4th holiday on Thursday. CBT trading will halt at midday on Wednesday, and not resume until Friday morning. We suspect a large contingent of traders will take Friday off, which could mean high volatility or no volatility in prices depending on the mid-July weather forecasts coming out at that time. The regular Monday Crop Progress report will get scrutiny, with most expecting an improvement in the crop condition ratings for corn and soybeans. USDA export inspections will be out on Monday morning. Weekly Export Sales will be delayed until Friday.

There is a risk of loss in futures and options trading.  Such trading is not appropriate for all individuals. Past performance is not necessarily indicative of future results.  Comments made in this article are in no way to be seen as an endorsement of futures and options trading. Reproduction or rebroadcast of any portion of this article without written consent of Brugler Marketing & Management LLC is strictly prohibited.  Visit our web site at or call 402-697-3623 for more information on our consulting and advisory services for farm family enterprises and agribusinesses.               


Copyright 2013 Brugler Marketing & Management, LLC