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What's Happening in
MarketMaxx?
Sept. 16, 2008
Hurricane Ike’s impact on Texas crops is yet to be determined, but
coastal production will likely be hindered. Damage to Corn Belt
agriculture could be in the form of higher fuel prices, depending on
damage to the massive Houston-area petroleum complex. Again, our
thoughts and prayers are with those who have suffered from the storm and
post-hurricane flooding.
Corn and soybean prices are still trying to figure out a trend following
the Sept. 12 USDA report (see analysis in our Market Commentary
below). So the stretch run to the end of MarketMaxx could go
anywhere. Here’s a reminder that the final time to make your
MarketMaxx 2008 trades is midnight Oct. 31. All of your corn and
soybeans must be sold before the contest closes.
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MarketMaxx Leaderboard
Top 10 Leaders – Corn Contest (Sept. 13, 2008)
Greg Salac, Summerdale, AL, $10.35.81
Thomas Salac, Robertsdale, AL, $9.33.33
Howard Wilson, Marlette, MI, $8.68.14
Charles Bonner, Summerdale, AL, $8.59.1
Greg Kaiser, Foley, AL, $8.40.23
Kent Borstad, Faulkton, SD, $8.30.74
David Bitto, Elberta, AL, $8.30.33
Kevin Holland, Huxford, AL, $8.22.9
Roy Sangmeister, Manhattan, IL, $8.15.65
David Womack, Atmore, AL, $8.15.42
Top 10 Leaders – Soybean Contest (Sept. 13, 2008)
Roy Sangmeister, Manhattan, IL, $21.98.06
Corey Brandau, Peotone, IL, $21.40.34
Greg Kaiser, Foley, AL, $18.33.58
Thomas Salac, Robertsdale, AL, $18.17.77
Greg Salac, Summerdale, AL, $17.63.22
Ed Krelo, Elkville, IL, $17.01.4
Kevin Holland, Huxford, AL, $16.60.22
Scott Arthur, Washington, IN, $15.75.77
David Bitto, Elberta, AL, $15.62.5
Rachel Wilson, Reeds, MO, $15.45.78
MarketMaxx Prizes
MarketMaxx offers some major prizes for winners
in the corn and soybean marketing contests. If you’re a farmer who
hasn’t served as a licensed commodity broker the past five years, you
can win a year’s use of a new combine or tractor. Go to www.MarketMaxx.net today and learn
all about the great prizes you’re playing for in the MarketMaxx
contest.
Grand prize for the corn contest is a Gleaner R5 or A5 series combine
(up to 100 combine separator hours). The soybean winner will receive a
year's use (not to exceed 250 hours) of the choice of any PowerMaxx
CVT-equipped AGCO RT or DT series tractor.
Second prize for each contest is a complete computer system plus
software from Syngenta Crop Protection. Third prize in the corn contest
is a complete Leica mojoRTK auto-steer system from Leica Geosystems.
Third prize in the soybean contest and fourth prize in the corn contest
is a DICKEY-john mini GAC Plus handheld moisture tester.
Visit www.marketmaxx.net/ and
explore numerous links to help you improve your marketing plan. Corn and
soybean futures charts help you follow the movement of the most recent
three-month contracts. There are also links to The Brock Report,
CBOT, Chicago Mercantile Exchange, Kansas City Board of Trade, New
York Board of Trade, Minneapolis Grain Exchange and Cash Grain Bids.
Got a question about a MarketMaxx trade, then visit the
MarketMaxx forum. It’s at www.marketmaxx.net/ and gives you
an opportunity to network with other players. The site enables you to
monitor how your trades in the corn and soybean contests stack up to the
leaders.
And don’t forget: Make your trades made by midnight Oct. 31., when
the game officially ends for 2008.
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Market Commentary
August Weather Trims Yields
By Melvin Brees, University of Missouri Food and Agriculture Policy
Research Institute economist
USDA’s Sept. 12 World Agricultural Supply and Demand Estimates (WASDE)
included production and carryover estimates for 2008-2009 corn and
soybean that, although on the low side, were within the range of
pre-report expectations. No changes were made to U.S. supply/demand
projections for wheat.
Based on dry weather conditions in August, corn yield expectations are
lowered 2.7 bu./acre to an average expected yield of 152.3 bu./acre.
That results in a forecast for 2008-2009 U.S. corn production of 12.072
billion bushels, down 216 million bushels from the August estimate. The
production estimate is within the range of pre-report trade estimates,
but less than the average expectation of 12.152 billion bushels. Reduced
expected new-crop corn feed use was largely offset by increased feed use
of sorghum and total reductions in corn feed/residual uses of 100
million bushels. No other supply/demand estimates were changed and
2008-2009 ending corn stocks are now projected to be 1.018 billion
bushels.
This is down 115 million bushels from the previous estimate. World
2008-2009 projected corn carryover of 109.94 million metric tons (mmt)
is down from the previous estimate of 112.38 mmt and less than the
previous year’s 123.46 mmt. However, tighter world corn supplies are
offset by increased supplies and use of wheat for feed.
USDA’s forecast for corn prices is increased by 10 cents and now
expected to range from $5 to $6/bu.
USDA’s average soybean yield estimate is reduced 0.5 bu./acre to 40
bu./acre, resulting in total 2008-2009 soybean production of 2.934
billion bushels. This is down 40 million bushels from the August
estimate. The production estimate is within the range of pre-report
trade estimates, but somewhat less than the average soybean production
expectation of 2.950 billion bushels. Old-crop crush and exports were
adjusted, resulting in a 5-million-bushel increase in beginning stocks.
New-crop crush was adjusted downward by 30 million bushels.
The net result of all production/use adjustments was no change in
expected 2008-2009 soybean carryover of 135 million bushels. Increased
production estimates for Argentine soybean production contributed to an
increase in projected world ending stocks from 49.28 mmt (August
estimate) to the current estimate of 51.23 mmt.
USDA’s 2008-2009 soybean price forecast is increased 10 cents, now
expected to range from $11.60 to $13.10/bu.
No changes were made to U.S. wheat supply/demand projections. World
wheat production and use is expected to increase significantly. More
wheat will be available for feed use as well as food use. World ending
wheat stocks are expected to increase from last year’s 118.49 mmt to
139.89 mmt. USDA’s forecast for 2008-2009 wheat prices was narrowed by
20 cents on each end and is now expected to range from $6.70 to
$7.80/bu.
Most analysts consider the estimates somewhat bullish and called for
higher futures price openings. In early trading, futures prices opened
sharply higher with double digit gains, but a weaker dollar and the
hurricane in the Gulf were also influencing price action. The report
estimates are within the pre-report ranges of market analysts’
expectations and other factors (energy prices, value of the dollar, fund
positioning, etc.) may soon overshadow the report estimates.
While the estimates offer positive news, the corn and soybean markets
have been in downtrends. World grain production is increasing, corn
carryover estimates are still above 1 billion bushels and the soybean
carryover projection is unchanged. Depending upon outside factors, and
unless the downtrends are broken, this suggests the possibility of
further downside price risk into harvest time.
Additional
Commentary
Corn And Soybean Exports Expected To Drop
By Darrel Good, University of Illinois Extension economist
Early USDA forecasts for the 2008-2009 corn and soybean marketing year
include prospects for substantial declines in U.S. exports from the
record levels reached in the 2007-2008 marketing year. The sharpest
decline is projected for corn. With U.S. corn and soybean stocks
expected to remain tight this year, the pace of exports could have
important price implications as the year progresses.
USDA currently projects U.S. corn exports for the marketing year that
just ended on Aug. 31 at 2.425 billion bushels. U.S. corn export
inspections as of Aug. 31 totaled 2.337 billion bushels and exports
reported in the weekly U.S. Export Sales report through Aug. 28
totaled 2.349 billion bushels. Census Bureau estimates are only
available through June 2008. At that juncture, cumulative Census Bureau
estimates exceeded inspections by 81 million bushels and estimates in
the U.S. Export Sales report by 55 million bushels.
If that margin persisted through August, exports will be near USDA’s
projection. Exports of 2.425 billion bushels would be record large. For
the 2008-2009 marketing year, USDA projects U.S. corn exports at 2
billion bushels, or nearly 18% below exports of the year just ended. A
number of factors point to prospects of weaker demand for U.S. corn.
Both wheat and coarse grain production outside of the U.S. are expected
to be record large in 2008-2009. Foreign wheat production is forecast at
603.4 million tons, nearly 9% larger than the 2007-2008 crops.
Feed use of wheat outside the U.S. is projected at 113 million tons,
nearly 17 million tons more than fed last year. Most of that increase is
expected in the European Union (EU). That increase results in a
projected decline in EU corn imports of 354 million bushels. While the
U.S. exports virtually no corn to the EU, the decline in import demand
makes more corn from other sources available to the world market.
USDA projects 2008-2009 foreign coarse-grain production at 760.3 million
tons, nearly 5% larger than production in 2007-2008. About 58% of the
year-over-year increase in foreign coarse-grain production is corn.
Larger corn exports are projected for South Africa and the Ukraine.
The strengthening U.S. dollar is also generally believed to be a
negative factor for demand for U.S. corn. While such expectations appear
logical, there is not a strong statistical relationship between the
value of the U.S. dollar and U.S. corn export volume. A more serious
concern about export demand may stem from prospects of a broader
economic slow down that could slow the rate of increase in world meat
demand and therefore the rate of increase in corn feeding.
As of Aug. 28, USDA reported that 359 million bushels of U.S. corn had
been sold for export during the 2008-2009 marketing year. That is nearly
30% less than sales at the same time last year. Early sales do not
always provide a good forecast of marketing year exports, but at a
minimum, importers are buying at a much slower pace so far this year
compared to both 2007 and 2006.
Soybean exports USDA expects U.S. soybean exports to have totaled
a record 1.145 billion bushels. Export inspections through Aug. 31
totaled 1.116 billion bushels and cumulative exports reported in the
U.S. Export Sales report through Aug. 28 totaled 1.117 billion
bushels. Through June, however, cumulative Census Bureau export
estimates exceeded USDA estimates by about 35 million bushels. It
appears that exports will reach or exceed the USDA projection.
For the 2008-2009 marketing year, USDA projects U.S. soybean exports at
1 billion bushels, or nearly 13% less than exported during the year just
ended. The decline reflects expectations of a small decline in total
world exports and larger exports from Argentina and Brazil. Imports
by China are expected to account for 47% of total world imports, but are
expected to be only about 1.5% larger than imports in 2007-2008. That
follows a 23% increase last year. Chinese consumption of soybeans is
expected to increase by nearly 5.5%, but the larger harvest there this
year will slow the rate of import growth.
Through Aug. 28, USDA reported that 279 million bushels of U.S. soybeans
had been sold for export during the 2008-2009 marketing year – an
11.5% increase from outstanding sales of a year ago. About 55% of the
outstanding sales were destined for China. For now, U.S. exports appear
to be benefiting from some continued disruptions in exports from
Argentina. The early sales pace, while not a good prediction of
marketing year exports, is encouraging.
Other News That Can
Impact Corn And Soybean Prices
Asian Soybean Rust Hits The South
USDA says that on Sept. 12. Asian soybean rust was reported on soybeans
in Phillips County, AR; Leflore and Sunflower counties, MS; Lowndes
County, GA; and Escambia County, AL. On Sept. 11, Asian rust was
reported on soybean plants from George and Yazoo Counties, MS. That
makes 28 new county reports since Sept. 1, USDA says. For a rust update,
go to sbr.ipmpipe.org/cgi-bin/sbr/public.cgi.
Soya & Oilseed Summit, Sept. 17-19, St. Louis
Soyatech will host leaders in agribusiness, policy and academia
to the Soya & Oilseed Summit Sept. 17-19 in St. Louis. Practical
strategies for the most pressing challenges and opportunities facing the
industry will be on the agenda. For more information, go to events.soyatech.com/conference.php?cid=4.
Brazil Has Record Grain Production
Soyatech reports that Brazil has produced a record 143.8 million
tons of grains in the 2007-2008 harvest. The country’s agriculture
ministry says the current harvest exceeded the previous harvest by 9.2%
and the numbers could be even better after the second corn crop from the
northeast comes in.
Corn production has expanded and accounts for a good portion of this
year's record harvest. The corn harvest totaled 58.59 million tons, or
14% more than in the previous harvest. Wheat production surged 71.2% to
3.82 million tons, but it is still not enough to meet demand in Brazil,
which continues to import the grain from Argentina.
Soy production grew only 2.8%, or by 1.66 million tons, to 60 million
tons. Brazil's grain exports could grow to 52.17 million tons, including
sales of soy, corn, beans and cotton.
China's 2008 Soybean Production Forecast Up 36.7%
COMTEX News Network reports that China's soybean output will
reach 17.5 million tons in 2008, up 36.7% from 2007's 12.8 million tons,
the first rise after production fell for three consecutive years,
according to the China National Grain and Oils Information Center.
Expanded planting acreage and increased unit output are the major
driving forces behind the production rise. China's soybean-planting
acreage was estimated at 9.65 million hectare for 2008 – 950,000
hectare, or 10.9%, more than 2007.
ASA Touts LibertyLink Soybeans Welcome in EU
The American Soybean Association (ASA) says it’s pleased to learn that
LibertyLink soybeans (A2704-12) from Bayer CropScience have received
final approval from the European Commission for importation into the
European Union (EU) for food and feed use. This will allow the
commercial launch of LibertyLink soybeans in the U.S. for the 2009
planting season.
"It has been more than 10 years since the EU approved a biotech-enhanced
soybean variety for importation," says ASA First Vice President Johnny
Dodson, a soybean producer from Halls, TN, who chairs ASA’s biotech
working group. "We welcome the approval of LibertyLink soybeans and hope
this approval will lead to a new era of timely, science-based EU reviews
for biotech-enhanced seed products."
The approval provides U.S. soybean producers with market access to
nearly half a billion consumers living in the 27 EU member states. Most
importantly, it provides livestock and poultry producers in these
countries with access to high quality U.S. soybeans and soybean meal.
"U.S. growers look forward to this and several other new
biotech-enhanced soybean varieties now under development that will offer
important benefits to consumers, growers, and the environment, ranging
from healthy oil profiles to increased yields to better weed control,"
says Dodson. "ASA and Bayer have worked in partnership to educate
foreign buyers on biotechnology and for regulatory clearance of
Bayer’s LibertyLink soybean."
2008 Texas Drought Losses Estimated At $1.4 billion
In contrast to the massive hurricane and tropical storm damage that
Texas has received this fall, the lack of rain and scorching
temperatures hit the state’s agricultural crops and beef operations
hard late spring and summer, leading to an estimated $1.4 billion in
drought losses, say Texas AgriLife Extension Service economists. Crop
losses were estimated at $1.1 billion, while livestock losses tallied
$260 million, which includes lost hay production, added supplemental
feed costs and other production expenditures.
In 2007, record rainfall flooded crops in South Texas and led to $200
million in losses. Statewide drought in 2006 totaled $4.1 billion in
losses – one of the worst since the 1950s. Though Texas received rain
in August this year that raised prospects for fall wheat production, it
wasn’t enough for cotton, corn, grain sorghum and hay crops in the
central, eastern and southern parts of the state. Severe weather
destroyed 1.3 million acres of the 4.7 million cotton acres planted in
Texas.
Cool Weather Worries Iowa Farmers
Soyatech reports that after heavy spring rains and record summer
flooding, Iowa farmers are finding cold comfort as autumn arrives.
September started out chillier than normal, leaving farmers and
agriculture experts worried that the cool temperatures could hurt an
already stunted crop.
Bill Northey, the state's agriculture secretary, says the delayed growth
makes the cool weather especially risky for farmers. "The cool
temperatures last week (early September) slowed crop growth. Hopefully
we'll see more of the warm weather we need," says Northey.
Ohio Farmland Preservation Summit Sept. 17
The ninth annual Ohio Farmland Preservation Summit is Oct. 2 from 8:15
a.m. to 4 p.m., at the new Nationwide and Ohio Farm Bureau 4-H Center on
Ohio State University's Columbus campus. Farmers, landowners, local
officials, land trusts and others are invited to attend. Registration
for the event closes Sept. 17.
The day will feature breakout sessions on a variety of topics including:
landowner basics, statewide land-use policies, creative funding sources
and agriculture in the local economy. Bobby Moser, dean of Ohio State's
College of Food, Agricultural and Environmental Sciences and vice
president of agricultural administration, will welcome participants.
Registration forms and fee of $40, which includes lunch, are due Sept.
17. Forms are available at www.ohioagriculture.gov/oda3/admn/farm/admn_farm_summit.stm.
UN Expert Faults U.S., EU Biofuel Use In Food Crisis
In one of the latest attacks on the biofuels industry, a United Nations
expert says that recent studies indicate that U.S. and European Union
(EU) targets for biofuel production by their grain farmers have been the
biggest cause of the world food crisis, reports the Associated
Press.
Olivier de Schutter, a Belgian professor, also says an international
monitor may be needed to supervise the production of energy sources such
as ethanol, which may end up being less beneficial to the environment
than expected, even as they cause global food prices to rise. Citing
various reports, he says biofuel production targets outlined by the U.S.
and EU have led to increased speculation on agricultural land and
commodities, and diverted cropland and feed away from food production.
He says the International Monetary Fund estimates that 70% of the rise
in corn prices was due to biofuels, with 40% for soybeans. The World
Bank, de Schutter adds, concluded that biofuels from grains and oilseed
in the U.S. and EU were responsible for up to 75% of changes in
commodity prices. Those numbers refuted by USDA and farm groups.
Agribusiness Job Web
Site
Go to www.agribizjobs.com/home/
offers excellent opportunities for job seekers and ag companies. The
site, part of Penton Media’s Ag Group, of which Corn & Soybean
Digest is a member, has a targeted online career center.
Agribizjobs.com offers industry employers a growing, qualified audience
of ag professionals and industry job seekers with agribusiness-specific
categorized job listings. It’s a joint effort by Corn & Soybean
Digest and its sister publications, BEEF, Farm Industry News,
Farm Press, Hay & Forage Grower and National Hog Farmer.
At www.agribizjobs.com/home/
employers can view complete but anonymous resumes for free, and pay only
to connect with a job seeker. Job seekers can post resumes in
ag-specific employment categories and sign up to receive e-mail alerts
when new positions are posted that match their search criteria.
Updated Marketing,
Biofuels And Other News At Corn & Soybean Digest Web Site
For quick and easy access to the latest analysis of corn
and soybean futures prices and market trends, go to our flagship Web
site cornandsoybeandigest.com/.
There’s information on the new farm bill regulations; insect, weed and
disease control; market commentary; and lots of other news you can use
to better manage your farm. If your latest issue of Corn & Soybean
Digest magazine isn’t handy, the site’s magazine archives
section enables you to access it and past issues to revisit subjects
that can impact your corn and soybean production and marketing.
The site's news from across the Corn Belt, other corn- and
soybean-production areas and the worldwide markets for corn and beans
can help you stay on top of events that can help or hurt prices. Go to
cornandsoybeandigest.com/
now and stay up-to-the-minute on the timeliest analysis and other
information on corn and soybean production and prices. Check the new CSD
Live video link for even more news vital to corn and soybean growers.
Subscribe
To These Other E-Newsletters from Corn & Soybean Digest
There are several other e-newsletters from Corn &
Soybean Digest. They include F.I.R.S.T. Harvest Reports
(seasonal), Corn E-Digest, Soybean E-Digest and Crop News
Weekly. Check them out at subscribe.cornandsoybeandigest.com/subscribe.cfm?tc=NLSUB.
Thanks for taking time to review this MarketMaxx newsletter. If you have
comments or questions about MarketMaxx, e-mail your editor, Larry
Stalcup, at beef2lar@suddenlink.net.
MarketMaxx is a biweekly e-newsletter for registered
players of MarketMaxx. To make trades or update your MarketMaxx account
visit http://www.MarketMaxx.net.
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