Marketing

Grain Outlook USDA cuts corn yield estimates, price remains healthy

Livestock Angles Livestock market strong as long as dollar is weak

The following marketing The feed category was cut Over the past few months month of September. However, analysis is for the week end- 75 million bushels to 5.7 bil- the livestock markets have if cattle prices continue to ing Nov. 13. lion bushels and exports were been extremely choppy and strengthen, the demand for PHYLLIS NYSTROM CHS Hedging inC. St. Paul CORN — Let’s get right to the bottom line for this week’s action: A bullish November World Agriculture Supply and Demand Estimates report which cut U.S. corn ending stocks to 1.7 billion bushels! New contract highs in the December and March contracts were seen on report day and the next day, but prices faded into the weekend. We only saw one daily export sales flash this week — on Nov. 10 with 5 million bushels sold to South Korea. The U.S. Department of Agriculture also finally recognized an increase in bumped 325 million bushels to a record 2.65 billion bushels. This flowed into a decline in ending stocks of 465 million bushels to 1.702 billion bushels, the lowest in seven years. The trade was anticipating ending stocks of 2.033 billion bushels. The ending stocks-to-use ratio came in at 11.5 percent compared to 14.4 percent for 2019-20. The average farm price jumped from $3.60 to $4.00 per bushel. The 2019-20 average farm price was $3.56 per bushel. The December contract soared 15.5 cents on report day, setting new contract highs on the way. JOE TEALE Broker Great Plains Commodity Afton, Minn. very erratic. This is not that new in the livestock markets. However, at this juncture, it appears this condition is likely to endure into the near future. The American economy is continuing to recover; while internationally, other world economies are still trying to recover. This will continue to leave the export of beef and pork questionable if the dollar strengthens in the near future. So far, the dollar has remained weak which has made American meat products very attractive. But if other countries stay with weakened economies, the U.S. dollar replacement cattle will increase. The bottom line is, it appears the cattle market is in the process of finding a bottom and could improve in the weeks ahead. The hog market has seen prices come under a little pressure the past several weeks. The demand for pork has slowed somewhat and numbers of live inventory have remained more than adequate to meet the weakening demand. At present, the market has seen a decline in price since mid-October and could possibly find some recovery in live prices in the near term. However, technically the market China’s corn import line — jumping it World ending stocks were 291.43 could strengthen and disrupt our appears weak at this juncture; and if from 7 million metric tons to 13 mmt! mmt, below the 296.37 mmt estimate improved meat exports. funds begin to liquidate further, this Many in the market believe this number could be closer to 22 mmt, as the USDA attaché in China expects. China has bought 10.76 mmt or 423.6 million bushels of U.S. corn so far for this marketing year. China may be on pace to replace Mexico as the world’s largest corn importer this year. The report didn’t give existing long positions a reason to vacate that stance. But as with every bullish market, corrections, consolidation and profit-taking will occur — which is what we also saw this See NYSTROM, pg. 24 and compared to 300.45 mmt last month. This will be the smallest world ending stocks number since 2014-15. The USDA woke up to reality and raised China’s corn import line to 13 mmt from their stubbornly held 7 mmt. They had just recently defended their decision not to increase China’s corn imports on the October report citing their adherence to “policy in place.” As for the cattle market, beef movement has been improved over the past several months which has helped cattle prices as we muddled through the heavy cattle. It now appears that weights are now topping and if demand remains the same or increases, this would be a positive for price appreciation in the months ahead. Grain prices have slowed the upward surge in replacement cattle since the could pressure prices even further. One thing looking as if it may stand in the way of a rally would be that China has been effectively been rebuilding its hog herd. This would put into question the likelihood exports to China could rapidly decline. In any event, the outlook for the hog market is at a crossroads and the next several weeks are likely to set the tone of the market through the remainder of the year. v week. The November WASDE report breakdown brought down ending stocks through a couple of avenues. The yield was dropped 2.6 bushels per acre from Cash Grain Markets corn/change* soybeans/change* St. Cloud $3.75 +.19 $11.00 +1.06 For marketing news between last month to 175.8 bu./acre and vs. the 177.7 bu./acre expectation. North Dakota’s yield was slashed 15 bu./acre Madison Redwood Falls Fergus Falls $3.83 +.19 $11.17 +1.03 No report available this week $3.77 +.19 $11.00 +1.06 issues ... visit to 45 bu./acre. Illinois corn yield was cut 5 bu./acre to 195 bu./acre and Iowa was lowered 2 bu./acre. Production fell Morris Tracy $3.82 $3.79 +.16 +.23 $11.10 $11.03 +1.06 +1.03 www.TheLand 215 million bushels to 14.507 billion bushels vs. the trade estimate of 14.659 billion bushels. Corn production has Average: Year Ago Average: $3.79 $3.44 $11.06 $8.34 Online.com declined from the November report to Grain prices are effective cash close on Nov. 17. the January report in six of the last *Cash grain price change represents a two-week period. seven years.

Information in the above columns is the writer’s opinion. It is no way guaranteed and should not be interpreted as buy/sell advice. Futures trading always involves a certain degree of risk.

Low soybean ending stocks propell price higher

NYSTROM, from pg. 23

Since China had not officially raised its low tariff quota from 7.2 mmt, the USDA was adhering to that number. On this report, they seemed to rethink that decision. China’s corn production was left alone at 260 mmt while China’s Ag Outlook Committee is using 264.7 mmt with consumption at 288.17 mmt.

Ukraine’s corn production was lowered 8 mmt to 28.5 mmt and exports reduced from 30.5 mmt to 22.5 mmt. Argentina’s corn production was unchanged at 50 mmt and Brazil’s unchanged at 110 mmt. Conab updated their Brazilian corn production, lowering it slightly from 105.17 mmt to 104.89 mmt.

Weekly export sales were on the low side of expectations at 38.5 million bushels. This brings total commitments to 1.345 billion bushels or 50.8 percent of the USDA’s record 2.65 billion bushel export forecast. We need to average 30.1 million bushels of sales per week to ring the bell.

Weekly ethanol production was the highest in 33 weeks with an increase of 16,000 barrels per day to 977,000 bpd. However, ethanol stocks were a 10-week high at 20.2 million barrels. Margins fell a penny to 15 cents per gallon. Gasoline demand was up on the week but is down 6 percent from the same time last year at 8.76 million bpd.

In other news, there is chatter that China may want to renegotiate the Phase 1 trade deal with a new U.S. president. What areas they may want to talk about are unknown. Reports of progress toward a Covid-19 vaccine propped up the U.S. stock market. The U.S. dollar hit a two-month low early in the week before recovering.

Markets will trade their normal hours the day before Thanksgiving on Nov. 25, then not reopen until 8:30 a.m. on Nov. 27. Grain markets close early on Nov. 27.

Outlook: The balance sheet for corn was friendly and the market reacted accordingly, closing higher for the second week in a row. There are still uncertainties surrounding the market with South American weather and Chinese demand the most obvious factors to monitor. Corn carries on the Chicago Mercantile Exchange have widened to 9-10 cents as values at the Gulf were weaker on the higher board and a pickup in movement.

With length building in corn, we can always expect a period of consolidation and profit taking from time to time. Friendly fundamentals haven’t changed and there hasn’t been a clear signal for managed money to exit length en masse. However, don’t lose sight that much of our demand is in China’s basket. There are many ways to limit your downside exposure while keeping the upside open; plus planning for next year’s crop.

For the week, December corn was 3.75 cents higher at $4.10.5 per bushel. It closed 17.5 cents off the new $4.28 contract high. The March contract was 5.75 cents better at $4.19.5, July up 6 cents at $4.26.25,

MARKETING a record 133 mmt with exports at 85 mmt. Argentina’s soybean crop was lowered 2.5 mmt to 51 mmt with and the December 2021 contract led gains with a unchanged at 100 mmt. Conab raised their Brazilian 9-cent rally to settle at $4.04.5 per bushel. Sharpen soybean production from 133.67 mmt to 135 mmt, a up those pencils! new record.

SOYBEANS — The soybean WASDE was even Weekly export sales were in-line with pre-report friendlier than the corn balance sheet as soybean estimates at 54 million bushels. Total commitments ending stocks dipped to 190 million bushels. January are 1.833 billion bushels or 83.3 percent of the soybeans traded to their highest price since July USDA’s 2.2-billion-bushel outlook. We need to aver2016 and meal pierced the $400 level for the first age 9.6 million bushels of sales per week to hit the time since May 2018. Soyoil also sprang to new con- target. Shipments for the week were a record at tract highs throughout the week on tighter vegetable 117.9 million bushels! oil stocks around the world. Palm oil traded to eightyear highs; sun seed values hit record highs, and there is chatter Russia may tax exports. The Buenos Aires Grain Exchange put Argentina’s soybean planting at 19.9 percent complete vs. 24 percent on average. Corn planting was 31.2 percent

With the lowest ending stocks number since 2013- complete vs. 44.3 percent on average. A private ag 14, soybeans ran to their highest price since July consultant in Brazil estimates farmers there have 2016, leaving old contract highs in their wake. U.S. sold 53 percent of the current soybean crop with othsoybean yield was cut 1.2 bu./acre to 50.7 bu./acre. ers going as high as 60 percent-plus. Last month it was pegged at 51.9 bu./acre and the trade was expecting 51.6 bu./acre. Key production states of Illinois, Iowa, Indiana, Nebraska and Wisconsin all saw their yields cut 2 bu./acre. The November to final soybean yield has declined in four of the last five years. This reduced production 98 million bushels to 4.17 billion bushels vs. the trade estimate of 4.251 billion bushels. Outlook: Tight supply, strong demand, and uncertain weather are the driving factors as we head into the holiday season. How La Niña plays out in Argentina and Brazil and the depth of Chinese demand have so far encouraged managed money to stay the course of holding length. Thus far, setbacks have been viewed as buying opportunities. I’ll make no projections of where the top may be, but instead

Minimal changes were made otherwise. What remind everyone that the risk is on unsold bushels if caught many traders’ attention was that neither China’s buying slows down and/or South American crush nor exports were raised. We already have over weather improves through December. Know your 80 percent of the 2.2 billion bushel export forecast on tolerance for setbacks and how to manage your risk. the books and crush margins have been very good. The uptrend remains in place with next resistance

China has purchased 1.014 billion bushels of U.S. closer to the $12 level. soybeans (27.6 mmt), excluding any sales to unknown For the week, January soybeans shot 46.5 cents that may end up being to China. Ending stocks higher to close at $11.48, closing 14.25 cents off the plunged 100 million bushels from last month’s 290 new $11.61.25 contract high. July soybeans rallied million to 190 million bushels. This was far below the 47.25 cents to $11.42 and November 2021 climbed 235 million bushel trade outlook. Stocks-to-use ratio 34.25 cents to $10.40.25 per bushel. of just 4.2 percent is significantly below the 2019-20 ratio of 13.2 percent. The average farm price was raised from $9.80 to $10.40 per bushel. Nystrom’s notes: Contract changes for the week as of the close on Nov. 13: Chicago December wheat fell 8.5 cents to $5.93.5, Kansas City dropped 3.25 cents to

On the world balance sheet, ending stocks were $5.52, and Minneapolis was 2.5 cents lower at 86.52 mmt, slightly lower than the 87.44 mmt esti- $5.54.75 per bushel. v mate. Last month they were at 88.70 mmt. If correct, it would be the smallest world ending stocks since 2014-15. Brazil’s soybean crop was left unchanged at Applications open for ASA scholarship

The American Soybean Association (ASA) wants to award a scholarship to an outstanding high school senior interested in pursuing agriculture.

The Soy Scholarship is a $5,000 one-time award presented to a high school senior who plans to pursue agriculture as an area of study at any accredited college or university in the 2021-22 academic year. The scholarship is managed by ASA and made possible through a grant the by BASF Corporation. High exports at 7 mmt. China’s soybean imports were school seniors may apply online until Dec. 6.

The scholarship is awarded in $2,500 increments (one per semester) for the 2021-22 school year. The student must maintain successful academic progress and be in good standing with the college or university to receive the full amount of the scholarship.

This article was submitted by the American Soybean Association. v

Key departures signal agriculture shakeup for Capitol Hill

By STEVE KARNOWSKI

Associated Press

MINNEAPOLIS (AP) — The reelection defeat of U.S. House Agriculture Committee Chairman Collin Peterson in Minnesota and some key retirements mean a shakeup is coming for the industry on Capitol Hill, with power likely to shift from the Midwest to the South and the coasts.

Both the House and Senate agriculture committees will get new chairs, and there will be a new top Republican on the House panel. Observers say the most likely replacements are expected to prioritize Southern crops such as peanuts, rice and cotton over traditional Midwest concerns of corn, soybeans, sugar beets and dairy. That could mean a new emphasis on nutrition programs that serve the poor. Peterson, a Democrat who lost his bid for a 16th term, was a major force in shaping several farm bills and a strong advocate for Midwestern agriculture in a House where the ranks of rural Democrats have been shrinking. He was known for working across the aisle, and he had Speaker Nancy Pelosi’s ear.Collin Peterson “I don’t think you can in any way exaggerate the magnitude of the loss for agriculture,” said former U.S. Sen. Heidi Heitkamp, a North Dakota Democrat whose name is in the mix as a potential agriculture secretary under President-elect Joe Biden. It will be hard to replace his institutional knowledge and his ability to win over liberals to deliver farm bills that work for Midwest agriculture, she said.

Peterson lost to Republican Michelle Fischbach, a former lieutenant governor and state senator. Fischbach plans to seek a seat on the Agriculture Committee, but she’ll have to draw heavily on her legislative skills to have much of an influence as a freshman in the minority party.

Peterson’s name has been discussed within the farm policy world as a potential appointee to a ranking post in the U.S. Department of Agriculture, maybe even as secretary.

“He was somebody who understood the details and minutiae of agricultural policy probably better than anyone in the country,” former U.S. Agriculture Secretary Tom Vilsack said. “He was a skilled negotiator, which you need to have to get farm bills through the process.”

Vilsack, a Democratic former governor of Iowa, said Peterson’s departure will be “particularly difficult” for the sugar, biofuels and dairy industries.

Democratic Sen. Debbie Stabenow of Michigan is the only one of the top four agriculture committee leaders returning in 2021. Republican Sen. John Boozman of Arkansas is expected to become the next chairman of the Senate committee, replacing Sen. Pat Roberts of Kansas if the GOP retains control there. Neither Roberts nor Rep. Michael Conaway of Texas, the ranking Republican in the House committee, sought reelection.

Peterson’s loss wasn’t a total surprise, given that his district has become much more Republican over the past decade. Agricultural interests spent heavily to try to keep him in power.

Kevin Paap, president of the Minnesota Farm Bureau, said the contest remains “the most talked about political race to anybody involved in agriculture.” The departures of Peterson, Roberts and Conaway will cost the agriculture committees 85 years of collective farm policy experience, he said.

The two most senior Democrats on the House panel, Reps. David Scott of Georgia and Jim Costa of California, both said last week that they’re running for the chairmanship. Rep. Marcia Fudge of Ohio, who has also been discussed as a potential agriculture secre-

Website connects farmers, landowners

AMES, Iowa — Accessing land to graze, or finding and message other users. They can also browse a livestock farmers to partner with, can be a barrier to curated list of grazing resources, including examples expanding integrated crop-livestock systems. A new of grazing lease agreements and contracts. The webwebsite by the Midwest Perennial Forage Working site also lists grazing specialists and organizations Group seeks to address this challenge. offering grazing support for each state participating

The Midwest Grazing Exchange (midwestgrazingex- in the exchange. change.com) is a free matchmaking service which aims For questions about the website, contact Meghan at to connect graziers and landowners who live in Illinois, (515) 232-5661 or meghan@practicalfarmers.org. Indiana, Iowa, Minnesota, Missouri and Wisconsin. Graziers can search for forage to graze and landowners can search for livestock to graze their land. The Midwest Perennial Forage Working Group’s mission is to increase land used for pasture and perennial forage production in the Upper Midwest,

The website lets users search listings through an and to improve the environmental performance of interactive map with filters for criteria like season, farming systems while maintaining agricultural proland or livestock type. Landowners can create list- duction and profitability. ings of what land or livestock they have to offer. Website users can create a free account to save listings of interest, add new listings, see contact details This article was submitted by Practical Farmers of Iowa. v tary, has not publicly said whether she was interested in leading the committee. She champions nutrition programs and represents a mostly African American district that includes parts of Cleveland and Akron.

Costa, who represents California farm country, and Scott, who represents part of Atlanta and several suburbs, indicated that they would emphasize the nutrition programs that fall under the committee’s purview, including SNAP, formerly known as food stamps; the Women, Infants and Children program; and the National School Lunch Program. Jim Costa They had less to say in their pitches to colleagues about crop subsidy and insurance programs that more directly affect farmers — an indicator of the changing priorities among House Democrats.

Former U.S. Sen. Joe Donnelly, a Democrat from Indiana who served on the Senate committee, said both Scott and Costa have deep agricultural policy backgrounds and would be “strong advocates for farm country.” Their current emphasis on nutrition is because they’ll need votes from urban lawmakers to get elected chairman, he said.

Less of a shift is expected on the Senate side, regardless of whether the GOP retains control there. Heitkamp, who also served on the committee, said she expects Boozman and Stabenow to work well together. Although Boozman represents Southern crops, Heitkamp said he also understands northern farm needs.

While the leadership implications are important, crucial issues won’t change, said Craig Cox, senior vice president for agriculture and natural resources at the Environmental Working Group, which is critical of federal farm policy, contending that current subsidy and other programs foster unsustainable practices. Topping the list, he said, is “the urgent need to really take a hard look at crop subsidies and crop insurance,” and what those programs cost taxpayers. Other priorities should include addressing unjust treatment for Black farmers, the contamination of ground and surface water from fertilizer and manure, and agriculture’s role in the climate crisis.

“The issues are issues regardless of who is occupying that chair,” Cox said. v

GRAND ALASKAN CRUISE & TOUR

12 days, departs May - Sep 2021

FROM $1,749 $1,499 *

TM

1-855-447-9589 promo code N7017