USDA EXTENDS EMERGENCY GRAZING THROUGH NOVEMBER... USDA Secretary Tom Vilsack today announced a two-month extension through Nov. 30, 2012, for emergency grazing on Conservation Reserve Program (CRP) acres due to the extensive drought. USDA also designated 147 additional counties in 14 states as natural disaster areas; 128 counties in 9 states due to drought. In the past seven weeks, USDA has designated 1,892 unduplicated counties in 38 states as disaster areas. Click here for more.
AUGUST ACTIVE MONTH FOR ASIAN SOYBEAN RUST... According to USDA’s Asian Soybean Rust (ASR) website, there are now 60 counties in the U.S. that have the fungus -- all in the Southeast -- and it expects new reports to continue in the southern states. But USDA says the continuation of hot and dry weather is likely to keep ASR out of the central and northern states. Click here for more.
ILLINOIS FARMLAND POSTS 5% GAIN IN FIRST HALF OF 2012... According to a survey conducted by the Illinois Society of Professional Farm Mangers and Rural Appraisers, the value of Illinois farmland rose 5% during the first six months of this year. The pace of increase in the gains of Illinois farmland was at a slower rate than the double-digit increases posted in recent years. Click here for more in “Your Precious Land.”
PF MIDWEEK MARKETING GAME PLAN UPDATE...
CORN: Futures have backed off the highs, but there are no major warning signs of a top. Still, it’s recommended you get current with advised with 2011- and 2012-crop marketings. Hedgers are 35% sold on expected 2012-crop production via cash forward contracts -- 25% for harvest delivery; 10% for March 2013 delivery -- with another 40% of expected production hedged with Dec. $6.50 put options purchased for 31 1/2 cents. Cash-only marketers are also 35% priced on expected new-crop production via forward contract -- 10% for harvest delivery; 10% for March 2013 delivery; and 15% for May 2013 delivery. Hedgers and cash-only marketers are 100% sold on 2011-crop in the cash market.
BEANS: Get current with advised old- and new-crop marketings. But we’ll hold off on advising additional sales for now as fundamentals are bullish. Hedgers are 50% sold on expected 2012-crop production via cash forward contract for harvest delivery with another 25% of expected production hedged with Nov. $14.00 put options purchased for 42 3/8 cents. Cash-only marketers have 50% of expected 2012-crop forward sold for harvest delivery. Hedgers and cash-only marketers are 100% sold on 2011-crop in the cash market.
WHEAT: Hedgers and cash-only marketers have 75% of 2012-crop sold in the cash market. Be prepared to increase cash sales if futures signal a technical top is in place. Hedgers may also add hedge coverage to protect downside price risk when the rally runs out of steam.
COTTON: Hedgers and cash-only marketers have 50% of expected 2012-crop production sold for harvest delivery. Be prepared to advance new-crop sales on a sharp price bounce as carryover is expected to rise sharply in 2012-13. Hedgers and cash-only marketers are 100% sold on 2011-crop in the cash market.
CATTLE: Fed cattle producers should carry all risk in the cash market for now. While summer grilling season is about complete, tightening supplies limit downside risk -- and could open fresh upside potential if demand is stronger than expected. Feeder cattle buyers and sellers should also carry risk in the cash market for now.
HOGS: Herd liquidation amid high feed prices continues to weigh on hog futures as the increase in pork supplies is coming at the same time market hog numbers are building seasonally. We don’t want to chase this market lower as a sharp price break is already built into futures, but be prepared to hedge an overdue corrective rebound.
FEED: We are not interested in locking in current, historically high prices for an extended period. But be prepared to extend coverage on a sharp price pullback as supplies will be tight through the 2012-13 marketing year. Given the supply concerns, price corrections are likely to be limited and won’t last long.
