A very good week for wheat, new crop corn exports

It was a mixed week for grain and oilseed export sales. USDA reports corn, soybean meal and wheat exports for the week ending August 26 were larger than expected while soybeans and soybean oil were within estimates. Physical shipments of wheat were less than what’s needed weekly to meet USDA projections for the 2010/11 marketing year.

Wheat came out at 1,024,100 tons (37.6 million bushels), down 5% from the week ending August 19 and 12% lower than the four week average. Nigeria was the leading buyer at 171,700 tons. At this point in the 2010/11 marketing year, wheat sales are 517.5 million bushels, compared to 321.1 million in 2009/10.

2009/10 corn had a net reduction of 28,500 tons (1.1 million bushels). The 2009/10 marketing year is officially over but there’re still some adjustments to be made. Cumulative old crop corn sales are 2.065 billion bushels, compared to 1.931 billion at the tail end of 2008/09. Sales of 1,686,700 tons (66.4 million bushels) for 2010/11 delivery were mostly to unknown destinations (848,300 tons).

2009/10 soybeans were reported at 917 tons, with a number of sales mostly offset by a handful of cancellations. With some calculations left to be done, 2009/10 soybean sales are 1.517 billion bushels, compared to 1.326 billion in 2008/09. Sales of 613,000 tons (22.5 million bushels) for 2010/11 delivery were primarily to China (175,000 tons).

Soybean meal was pegged at 156,000 tons, up sharply from the previous week and 93% higher than the four week average. The top purchaser was Japan at 26,500 tons. For the marketing year to date, soybean meal sales are 9,722,100 tons, compared to 7,224,700 this time last year. Sales of 222,400 tons for 2010/11 delivery were mostly to the Philippines (80,700 tons).

Soybean oil was placed at 7,900 tons. Morocco was the leading buyer at 27,000 tons while unknown destinations canceled on 19,000 tons. So far this marketing year, soybean oil sales are 1,460,300 tons, compared to 916,500 a year ago. Sales of 4,400 tons for 2010/11 delivery were to Mexico.

Net beef sales totaled 11,600 tons. That’s 4% below the prior week but 8% above the four week average. The listed buyers were Japan (4,800 tons), Vietnam (1,700 tons), Mexico (1,500 tons), Canada (1,300 tons) and the Netherlands (600 tons).

Illinois farmland values up

Corn Belt trends in farmland are generally reflected in a mid-year Illinois survey. Don McCabe with the Illinois Society of Professional Farm Managers & Rural Appraisers released the latest numbers for Illinois farmland at the 2010 Farm Progress Show in Iowa this week. He says Illinois farmland values the first six months of this year increased slightly in all categories with excellent quality land up 1.7 percent ($131 an acre) over the first six months of 2009.

“We can see that even though farmland is not increasing at a rate that it maybe did for the prior two or three or four years, we still have an upward bias towards prices,” said McCabe.

McCabe says the average price for the best quality land is $7,665 an acre in Illinois with some well over $8-thousand-dollars. The average price for fair quality land is $4,646 an acre. And, McCabe says the trend of fewer acres offered in the market continues, especially compared with the first half of 2009.

Missouri reaches settlement with PSF

The State of Missouri has reached a settlement with Smithfield Foods and Premium Standard Farms (PSF).

Attorney General Chris Koster says the settlement provides a firm schedule under which modern technology will be installed in hog barns operated by the company, and Koster says the agreement also includes $1 million in voluntary payments by the company. PSF will pay $100,000 each to the local county school funds for the counties of Gentry, Daviess, Mercer, Sullivan and Putnam. PSF will pay a total of $500,000 to the county road funds for the following amounts: Daviess ($90,000), Gentry ($90,000), Grundy ($50,000), Mercer ($90,000), Putnam ($90,000) and Sullivan ($90,000).

Considering the penalties, the Missouri AG is confident PSF will meet the deadlines set in the settlement, $2,000 per day, per barn, for the first 30-days of noncompliance, the penalty goes to $4,000 for the next 30 days of noncompliance and then $6,000 per day for 60 days and beyond of noncompliance.

“Now, no company is going to eat those kinds of penalties when the other option is simply to apply the modern technologies to the barn as required,” said Koster.

Premium Standards Farm President Bill Homan calls the time-line aggressive, but says the company will install the $7.5 million in equipment on time. And Homan says the settlement should finally resolve the dispute which he says put 1,100 jobs in jeopardy.

“I think it is just a great bit of news for our employees and for the economy here in north Missouri,” Homan said.

FAO trims Russian wheat estimate a little more

The United Nations Food and Agriculture Organization has reduce its wheat-output estimate for Russia by 10% and has raised its export estimates for the U.S. by 43% The drought prompted FAO to cut its projection for the Russian wheat crop this year by five million metric tons to 43 million tons.

The new estimate is lower than the USDA projection of 45 million tons and the International Grains Council’s figure of 44 million tons. The Russian crop was 60 million tons last year.

As a result, the FAO raised its U.S. wheat exports estimate in this marketing year to 33 million tons, an increase of 10 million tons from its outlook in June.

Thursday midday cash livestock prices

A light to moderate cattle trade took place in the South on Wednesday at mostly 97.00; best guess is that Kansas traded around seven to eight thousand head, Texas eight to ten thousand.  Active business was seen in Nebraska with about forty to forty-five thousand head traded, the bulk of those sold at 153.00 on a dressed basis. Other than a little cleanup trade, it looks like business may be done for the week. Asking prices on the few cattle left on the show lists are around 98.00 plus in the South, and 155.00 plus in the North. Week to date negotiated sales were confirmed by USDA Mandatory at 11,626 head through Wednesday afternoon.

Boxed beef cutout values were higher at midday, choice beef is up .33 at 162.95, and select is .55 higher at 157.41.

Cattle receipts at the Huss Platte Valley Auction in Nebraska on Wednesday totaled 1800 head. Compared with two weeks ago, based on a narrow test steers trended fully steady and heifers were steady. Demand and trade activity was moderate to good. Slaughter cows and bulls trended fully steady. Feeder cattle medium and large 1; 618 steers averaging 871 pounds traded at 113.46 per hundredweight. 1443 heifers weighing 828 pounds brought 108.73.

Barrows and gilts in the Iowa/Minnesota trade opened 1.02 lower; the West is down .87 with both at 77.00 on a carcass basis. Eastern direct trade is .71 lower at 76.38. Missouri direct base carcass meat price is steady to 1.00 lower from 73.00 to 74.00. Nationally on a live basis barrows and gilts are 2.43 higher from 58.50 to 64.00, with a weighted average of 63.27.

Iowa barrows and gilts last week averaged 265.6 pounds, 1 pound lighter than the previous week, and1.4 pounds below 2009.  The scale house is having a tough time finding the seasonal bottom as smaller market hogs reflect the ravages of the hot summer as well as very current finishing floors.

55 IL counties designated natural disaster areas

The USDA has designated 55 Illinois counties natural disaster areas. In making the announcement, Ag Secretary Tom Vilsack said the action will provide help to farmers who have suffered significant production losses.

In addition to the 55 primary counties in Illinois, the list also includes contiguous counties in ILLINOIS, INDIANA, IOWA, MISSOURI and WISCONSIN.

Primary counties in Illinois:

Adams, Cumberland, Iroquois, Madison, Sangamon, Bond, Edwards, Jasper, Marion, Schuyler, Brown, Effingham, Jefferson, Mason, Scott, Calhoun, Fayette, Jersey, McDonough, Stark, Carroll Fulton, Jo Daviess, Menard, Stephenson, Cass, Greene, Kankakee, Mercer, Vermilion, Christian, Grundy, Knox, Montgomery, Warren, Clark, Hamilton, Livingston, Morgan, Wayne, Clinton, Hancock, Logan, Pike, White, Cook, Henderson, Macon, Randolph, Will, Crawford, Henry, Macoupin, Rock Island, Winnebago

Illinois contiguous counties: Boone, Du Page, La Salle, Moultrie, Shelby, Bureau, Edgar, Lake, Ogle, St. Clair, Champaign, Ford, Lawrence, Peoria, Tazewell, Clay, Franklin, Marshall, Perry, Wabash, Coles, Gallatin, McHenry, Piatt, Washington, De Kalb, Jackson, McLean, Richland, Whiteside, De Witt, Kane, Monroe, Saline, Woodford, Douglas, Kendall

Indiana: Benton, Knox, Newton, Sullivan, Vigo, Gibson, Lake, Posey, Vermillion, Warren

Iowa: Clinton Dubuque Lee Muscatine Des Moines Jackson Louisa Scott

Missouri: Clark, Lincoln, Perry, Ralls, St. Louis, Lewis, Marion, Pike, St. Charles, Ste. Genevieve

Independent City: St. Louis

Wisconsin: Grant, Green, Lafayette, Rock

Wheat pushes world food prices higher

The United Nations Food & Agriculture Organization (FAO) says the sudden sharp rise in international wheat prices has pushed world food prices to their highest point in two years. The FAO Food Price Index increased five percent in August putting it at the highest point since September of 2008. However, it is still 38 percent below the peak it hit in June of 2008. Besides wheat, sugar and oilseeds contributed to the increase.

Read more from FAO here:

Texas grower to lead Cotton Inc

Texas cotton producer Ricky Bearden has been elected the Cotton Incorporated Chairman for the 2010 through 2012 term. Bearden he grows cotton, wheat, milo, peanuts and black-eyed peas on his 6,000-acre farm at Plains. He has served as a director on the boards of the National Cotton Council, Cotton Incorporated, and the American Cotton Producers and was also president of Plains Cotton Growers, Inc. from 2004 to 2006. Bearden succeeds California grower Ted Sheely, who held the post for t¬he prior two years.

Average farm milk price should be 60 cents higher

The National Ag Statistics Service says the average U.S. milk price for August should increase 60 cents from July to $16.60 per cwt. All states are expecting an increase in price from July with Wisconsin producers getting the largest gain of $1.00 per hundredweight to $16.60. It was followed by Idaho with a 90 cent increase to $15.50, New Mexico with an 80 cent increase to $16.20 and Minnesota with a 70 cent increase to $16.10. California producers will see a 62 cent increase to $15.50. Pennsylvania’s price for August milk is $18.70 and New York is $17.90. Michigan is at $17.30 and Texas is $17.10.

For the first time in five months, prices were up at the Fonterra auction. Daily Dairy Report says anhydrous milk fat was up 9.5 percent from the August sale, skim milk powder was 15.8 percent higher and whole milk powder gained 18.8 percent from last month. The auction will now be held twice a month so the next sale will be September 15th.

Wheat up sharply on purchases by Egypt and Germany

Soybeans were lower on technical selling and profit taking. Fundamentals continue to turn less bullish, if not outright bearish. Early yields from some areas have come in better than expected and the trade sees a big increase in South American planted acreage. Ahead of the September 10 USDA supply and demand revisions, most expectations are for bigger U.S. production estimates. Contracts were higher early on outside market direction and the strength in wheat, but couldn’t follow through. Soybean meal was lower following beans while oil was up on spillover from crude oil. According to a Chinese grain policy center, via Dow Jones Newswires, Beijing may offer a soybean reserve auction this month to help lower soaring domestic prices. USDA’s weekly export sales report is out Thursday at 7:30 AM Central. Soybeans are pegged at 550,000 to 950,000 tons, meal is seen at 75,000 to 325,000 and oil is placed at 0 to 25,000 tons.

Corn was higher on fund and technical buying, in addition to spillover from wheat and the outside markets. The dollar was lower while the Dow and crude oil were both sharply higher. Demand continues to look strong with corn expected to increase its share of the global feed market. Also, there are continued reports of lower than expected yields from some of the big production areas. In general, many in the trade see a downward production revision in the September 10 USDA update. Ethanol futures were higher. Weekly U.S. corn sales are expected to be between 800,000 and 1.5 million tons. The 2009/10 marketing year for corn ended August 31.

The wheat complex was sharply higher on fund and technical buying, along with spillover from the outside markets. The big supportive feature was a pair of significant export sales. Egypt bought 225,000 tons of U.S. wheat, bypassing French wheat which has soared in price this week – additionally U.S. wheat is substantially higher quality than most other origins. Also, Germany picked up 20,000 tons of U.S. hard red spring, its first purchase of non-durum U.S. wheat in 3 years following excessive rain during harvest. Cooperative Bulk Holding Ltd. has Western Australia’s crop at 6 million tons, following drier than average weather during the growing season, and large portions of Argentina remain dry with the Rosario Grain Exchange pegging production at 9 million to 10.5 million tons. The U.N.’s Food and Agriculture Organization lowered its estimate for Russia to 43 million tons while increasing the U.S. export projection to 31 million to 33 million tons. According to Pakistan’s Ag Ministry, via Dow Jones Newswires, flooding has destroyed not only growing crops but roughly 1.5 million tons of wheat reserves. European wheat was weak, waiting to see how much demand for U.S. wheat will increase; November Paris and November London were both down .1%. Weekly U.S. wheat sales are estimated at 600,000 to 1 million tons.

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