Friday 27th January 2012

Closing Grain and Livestock Futures: November 25, 2009

December corn closed at $3.92, up 16 cents
January soybeans closed at $10.54 and 1/2, up 8 and 1/2 cents
December soybean meal closed at $318.00, up $2.60
December soybean oil closed at 40.57, up 87 points
December wheat closed at $5.50 and 1/4, up 17 and 1/4 cents
December live cattle closed at $83.67, up 27 cents
December lean hogs closed at $59.42, up 80 cents
January crude oil closed at $77.96, up $1.94
December cotton closed at 71.07, down 45 points
December Class III milk closed at $14.83, up 13 cents
Dow Jones Industrial Average: 10,464.40, up 30.69 points

Renew Energy ethanol plant should keep running

Renew Energy says it does not have any plans to shut-down their ethanol plant in Jefferson, Wisconsin. Recently the company filed notice of potential layoffs with the state as part of its bankruptcy proceedings but it was mainly a formality. CEO Jeff White says the plant is running, it is profitable, they are talking with several potential buyers and they expect to come out of bankruptcy sometime in January “We’re making money so why would you close the plant down?”

As part of the bankruptcy process they have appointed a Stalking Horse Bid under which a buyer creates a market by agreeing to buy the company at a certain price, “Which is $55 million plus receivables and inventory. That will be subject to an auction on December 11th” White expects any buyer to retain most if not all of the employees. “A couple of senior managers might be exposed including myself but other than that I expect to see all of the employees employed.”

The plant is running at about two-thirds capacity but he says that is due mainly to the economics in the industry right now and tight corn supplies. In fact, they have just fired-up their 10,000 bushel-per-hour grain dryer so the company can accept corn straight from the field.

Jeff White talks about the situation:

Jeff White

Will 2010 be Missouri’s year?

Commentary

I’ve just gotten word from the Missouri Cattlemen’s Assn. that HSUS filed the necessary paperwork yesterday with the state attorney general to mount a statewide referendum. The question now is, what’s the goal? Word is Paul Shapiro, the 30-something self-styled HSUS farm animal guru, says the initiative will be focused on puppy mills. Time will tell, I guess.

However, the filing of papers in Missouri begs the question as to whether Wayne Pacelle, HSUS president, will make good on his threat to take a similar path in Ohio in hopes of overturning the recent election victory in that state which created a state livestock standards committee. He vowed he’d not let the voters’ of Ohio get in the way of the HSUS agenda. Again, time will tell.

Let’s hope it’s puppy mills and HSUS has decided it can’t afford to fight a two-front war against legitimate animal users. However, I’m a big believer in forewarned is forearmed.

What this development does in spades is make it crystal clear that we must renew our efforts to put the public on notice that we’re the folks who feed them. Especially at this time of year, let’s take the effort to impress upon our brethren in the cities that without farmers and ranchers, Thanksgiving is less about thanks and a whole lot about hoping someone is giving.

We’ve had too many stupid incidences in the last month to ignore the need to rebuild relationships with our customers. We’ve had undercover video in New York and Vermont exposing idiocy; we’ve had four separate farmers whacked by the feds for illegal drug use in their animals, and we’ve had at least one farmer caught illegally discharging waste into a waterway.

All of these are separate distinct incidences and can be brushed aside as just a really bad coincidence. That’s reality. But reality and perception are two wholly distinct things. Our enemies revel in our mistakes, taking them, exaggerating them and marketing them to the public as the standard operating procedure of our operations.

Start building alliances. State ag groups need to sit down NOW and begin to plan for how they can market their people and their processes to the public. Talk to feed companies, animal drug companies, equipment companies — any company which makes its living off selling to farmers. We need to look beyond ag’s traditional allies and cultivate new friends.

Check them out, and if they seem approachable, sit down with the local, county and state humane societies and animal welfare groups — keeping in mind they’re not affiliated with HSUS for the most part. Ohio enjoyed the support of the American Humane Assn., which in the media is invaluable and steals a whole lot of HSUS’s holier-than-thou status.

Talk with reporters who cover ag and then branch out to those who cover business, those who write food sections, ande those who write about consumers and “lifestyle” issues. Educate these people as to process, product, economic contribution, etc., but impress upon them that the people who grow food in your state are good people.

Talk with legislators — the message is the same, but you’d be surprised how many “friendly” state house folks can run for cover when threatened with awkward headlines and ugly campaigns. Show them you’ll be their ally.

Talk to your processors and the retailers. Make sure they won’t stand silently by if ag is attacked. Again, make sure they understand and appreciate you’re the good guys and will stand with them or in front of them when — not if — they’re attacked.

The message here is simple — prepare now! If you wait until the barn is on fire, you’re simply going to have to build a new — and very different — barn, and one likely not nearly as nice as the one you enjoy today.

GROWMARK buys SemFuel L.P. facilities

GROWMARK is buying the Wisconsin and Michigan retail business of SemFuel L.P. of Green Bay. The business will be operated by two GROWMARK cooperatives, Servco FS of Antigo and Frontier FS of Jefferson. SemFuel has bulk fuel plants in Wisconsin Rapids, Waupaca, Merrill and Oconto Falls along with four sites in Michigan at Escanaba, Wilson, Daggett, and Kingsford. There are automated fueling sites in Green Bay, Ashwaubenon, Wisconsin Rapids and Appleton. Terms of the deal were not disclosed.

EU decision could impact soybean demand

The U.S. soybean industry is anxiously awaiting a decision from the European Union Commission that will impact soybean exports to the EU.

The EU Commission is deciding whether to approve Syngenta’s Agrisure—MIR604 biotech enhanced corn.  Traces of the corn were found in some EU export bound soybean and soymeal shipments earlier this summer, causing the EU to halt imports from the U.S.  If the EU Commission approves Agrisure, normal U.S. soy shipments to the EU could resume. 

Market analyst Sue Martin of Ag and Investment Services in Webster City, Iowa says a positive decision could have big consequences.  “All of a sudden you could see a pent-up demand that amounts to 6 to 7½ million metric tons,” says Martin. “That could usher in a lot of demand to the U.S.  It would have the same impact as China buying in the market—and your prices could go up nicely.”

Martin says the EU’s feed and livestock industries are getting desperate.

“The feed industry there, the livestock producers and the processors are so badly in need of soybeans for meal that they’re just begging,” she says, “because you’ve got industries going out of business.”

The EU is the fourth largest export market for U.S. soybeans, representing sales of more than one billion dollars in 2007.

Dairy specialist says “Get the corn out”

Yeast, molds and mycotoxins and 25 to 30 percent moisture and the troubles they cause are what many corn and livestock producersare faced with. The University of Illinois held a webinar recently with key experts last week on strategies for wet corn. When it comes to wet corn storage, an extension dairy specialist has a lot to say.

635wed

Estimating the size of the grain and soybean crops

When the USDA released its November crop production report, some analysts thought the numbers were too high.  It’s not the first time the USDA has heard criticism of one of its reports.  At the recent farm broadcasting convention in Kansas City, we asked Mark Harris, director of the Research Division of the National Agricultural Statistics Service to review the process for estimating crop size.

640wed for 11-25-09

About my turkey. . .

Commentary

Tomorrow is Thanksgiving Day which means many of us will enjoy a traditional Thanksgiving dinner.  AFBF’s 24th annual informal price survey of classic items found on the Thanksgiving Day dinner table indicates the average cost of this year’s feast will cost 4% less than last year’s meal.

However, that if you want to purchase organic, free-range, antibiotic-free or locally grown turkey — or other menu items — you probably aren’t going to get bargain basement prices.  

I have nothing against vegetarians, locavores or people who eat only organic food. But like most Americans, I would prefer to celebrate the harvest bounty with food and fellowship.

AUDIO

ASA supports disaster assistance legislation

The American Soybean Association supports efforts in the Senate to provide financial help to farmers who suffered weather related losses during 2009.  

Senate Ag Committee Chair Blanche Lincoln and two other senators have introduced a bill to pay farmers up to one-point-three billion dollars in direct payments in counties declared “primary” disaster areas by USDA.  The dollars would come from leftover bank bailout funds. 

ASA president Johnny Dodson says that direct payments would be more efficient than using the Supplemental Revenue Assistance Program (SURE) to pay farmers.  He says direct payments could be handled more quickly and would put less administrative burden on USDA.  Joining ASA in the request are the National Cotton Council, Southern Peanut Farmers Association, USA Rice Federation and the U.S. Rice Producers Association.

Beans finish firm on solid demand: November 24, 2009

Soybeans closed modestly higher on technical and speculative buying with contracts settling near the highs of the day. Demand remains strong from most sectors, especially the export market and domestic buyers. Still, it was an up and down day with beans receiving pressure from the outside markets, corn and wheat. Overall, trade was pretty quiet ahead of the holiday with January unable to break resistance around $10.50. Soybean meal was mostly higher on solid demand while bean oil was up on spillover from the soybean pit. Celeres reports that 74% of Brazil’s 2009/10 soybean crop has been planted with production pegged at 64.67 million tons. The U.S. Census Bureau’s October soybean crush figures are due out Wednesday at 7 AM Central. The crush is pegged at 163.7 million bushels, bean oil stocks are seen at 2.796 billion pounds and meal stocks are placed at 349,000 short tons.

Corn was modestly lower on profit taking, fund selling and spillover from the outside markets, pushing contracts near the lows of the day by the close. Contracts took the path of least resistance, pretty much extending Monday’s late sell-off. Also, the CME Group says that it will not have a vomitoxin discount for CBOT corn futures as was discussed last week following discussions with producers and reading quality reports. If losses were limited by anything, it was the slow harvest pace and uncertainty over the final yield and production figures. Ethanol futures were lower.

The wheat complex was sharply lower, ending the day near two week lows, on fund selling, profit taking and the higher dollar. When the dollar goes up, wheat tends to go down and vice versa. The domestic and international supply and demand fundamentals remain negative. European wheat was lower on spillover from U.S. trade and Jordan purchasing 150,000 tons of Black Sea wheat; January Paris was down 1.9% and January London was .7% lower. India’s Farm Ministry reports that federal wheat stocks are 30 million tons, which is nearly double New Delhi’s buffer level of 16.2 million tons.