Marketing

Grain Outlook Prospective Planting and Grain Stocks report rockets corn Livestock Angles Covid decline should help livestock prices

The following marketing analysis is for the week ending April 2. CORN — The market was treading water waiting for the March 31 Prospective Planting and Grain Stocks reports. And boy, were they worth the wait! Nothing had prepared us for the surprise the U.S. Department of Agriculture had in store. PHYLLIS NYSTROM CHS Hedging inC. St. Paul The five top producing corn states of Iowa, Illinois, Indiana, Minnesota and Nebraska are all expected to have unchanged or lower acreage this year. Corn acreage in Minnesota this year is expected to stay at last year’s 8 million acres, Illinois is estimated to fall 400,000 to 10.9 million acres, Iowa down 400,000 at 13.2 million, North Dakota up 1.35 million to 3.3 As we approach the end of March and move into the month of April, the livestock markets have had a good month as prices have moved higher to levels not seen in quite a while. With the Covid infections declining and the lockdown loosening, restaurants are reopening — which has increased the demand for meat products. The outlook appears to be improving. The JOE TEALE Broker Great Plains Commodity Afton, Minn. up cattle are now disappearing and feedlots are closer to normal numbers on feed before the Covid crisis. Cattle on feed numbers have been declining over the past several months which has helped turn the corner and improved prices for finished cattle. The replacement market has also improved since those March 2020 lows to near the levels they collapsed from. As

The corn acreage estimate million acres, South Dakota caveat to this is because of we look ahead, the outlook came in below the lowest estimate at up 650,000 to 5.6 million, Nebraska the unemployment problem, demand appears to be positive but guarded; just 91.144 million acres. The average down 300,000 at 9.9 million, Indiana from this point forward will likely because a lot will depend on an improvestimate was 93.2 million and last down 200,000 at 5.2 million, and decline until the economy rebounds to ing economy which will have a direct year’s planted acreage was 90.82 mil- Wisconsin up 150,000 at 4.15 million better levels. All livestock markets at influence on demand for product. The lion acres. It was also nearly 1 million corn acres. this writing were either overbought or weeks ahead will be important as to acres less than the USDA’s estimate at their February Outlook Forum. Many expect final corn acres to be higher than the March 31 forecast. approaching that condition. This would advise caution at this juncture; but which direction cattle prices will take into the summer months. Grain stocks as of March 1 were 7.701 billion bushels vs. 7.767 billion Historically, this has proven difficult to do. In recent history, the average acredoes not mean higher levels can’t be attained. The hog market has had an impressive rally over the past several months. bushels expected. This is the lowest age increase from the March to June Cattle prices have continued to Hog numbers have been reduced March 1 stocks number in seven years. report is 800,000 acres. However, if the improve since their lows established in because of the severe cold weather Last year we had 7.952 billion bushels weather cooperates and prices stay March of 2020. This has been mainly back in February which aided the on hand on March 1. This confirms we elevated, we should see at least a mod- due to the fact that the market got strong market in the past two months. have not yet rationed this year’s corn est increase in acreage. Combined corn overdone on the downside from the Couple this with a good export marand ending stocks are closer to 1.2-1.3 and soybean acreage at 178.7 million scare of Covid virus. This caused the ket and prices moved to levels not billion bushels. The USDA’s last esti- acres are well below the record of 180.3 lockdown of people in their homes and seen since 2014. mate was 1.5 billion bushels. We won’t see the USDA 2021-22 balance sheet until the May 12 World Agriculture Supply and Demand Estimates report. Corn locked up the 25-cent limit See NYSTROM, pg. 20 million in 2017. Corn stocks were slightly lower than anticipated at 7.701 billion bushels and the closure of businesses which obviously hurt demand for beef. As things have relaxed, demand for beef has once again picked up. As a result, the backedCurrently, the market is extremely overbought and could be subject to a correction. However, this maybe short lived as the latest U.S. Department of Agriculture Hogs and Pigs report immediately after the report’s release. The run-up erased the loss for the month and saw the monthly continuous corn chart keep its eight-month streak of higher closes alive. New contract highs were set in virtually all the contracts with May at $5.85, July at $5.66.25, and December at $4.93 per bushel in the night session following the limit up move. We ended the holiday-shortened trading week on a mixed note with old crop posting small losses and new crop with decent gains. This Cash Grain Markets corn/change* soybeans/change* St. Cloud $5.27 +.08 $13.74 +.11 Madison $5.22 +.04 $13.78 -.04 Redwood Falls $5.34 +.03 $13.79 -.04 Fergus Falls $5.22 +.04 $13.64 +.06 Morris $5.23 +.06 $13.68 .00 Tracy $5.30 +.06 $13.90 +.01 Average: $5.26 $13.76 released March 25 was friendly due to the reduced numbers. One noticeable condition is as the pork cutout has risen, the movement of products has slowly decreased. This could be signaling a slowly diminishing demand for pork because of higher prices. The next few weeks should give a signal as to which direction the hog market will take into the summer months. v emphasizes the more bullish number Year Ago Average: $2.85 $7.89 on the reports came from the acreage number. Grain prices are effective cash close on April 6. *Cash grain price change represents a two-week period.

NYSTROM, from pg. 19

the lowest in seven years. The trade was anticipating 7.767 billion bushels. On-farm bushels at 4.04 billion bushels are the lowest in seven years and account for 52.4 percent of total March 1 stocks. Last year, 56 percent of March 1 stocks were held on-farm. This is the lowest percentage since 2013 and the third-lowest since 1970.

Weekly export sales were in the lower half of expectations at 31.4 million bushels. Total sales have reached 2.587 billion bushels which are 99.5 percent of the USDA’s current 2.6 billion bushel outlook. China canceled a small cargo this week but still has 14.7 million metric tons of outstanding U.S. purchases to ship. New crop sales were 2.3 million bushels, bringing total new crop sales to 78.7 million vs. 69.3 million bushels last year.

Weekly ethanol production bounced 43,000 barrels per day higher this week to 965,000 bpd. Ethanol stocks were down 695,000 barrels at 21.1 million barrels. Margins fell a nickel to 7 cents per gallon. Gasoline demand rose to a 25-week high at 8.9 million bpd. Demand was 34 percent above last year’s Covid-19 demand slump, but 2.6 percent below the same week in 2019. Outlook: The three-day holiday weekend shortened our trading week and may not have provided traders enough time to fully incorporate the new numbers into their balance sheets. One thing that was driven home this week was that we need to bring more acres into production this year or see next year’s ending stocks slide lower. Attention to spring planting weather will rise, but current forecasts predict favorable conditions. We need to further ration old crop stocks and add acres. Funds had trimmed their length going into the reports and have room to increase it. The trend is higher, but watch for signs higher acreage estimates are being incorporated if the weather cooperates.

Looking ahead to the April WASDE report, exports and feed usage need to be raised, and ethanol should at least hold steady if not increase slightly. This should lower the 2020-21 ending stocks number to the 1.1 to 1.3 billion bushel range.

For the week, May corn set a new contract high at $5.85 and was up 7.25 cents for the week at $5.59.75. July hit a new high at $5.66.25 and was up 9.5 cents at $5.45.25, and December corn reached a new high at $4.93 and was up 18 cents for the week at $4.84.5 per bushel.

The Chicago Mercantile Exchange is planning to launch a micro Bitcoin futures contract on May 3, pending regulatory approval. The contract will be cash-settled and be worth one-tenth of one Bitcoin. SOYBEANS — Soybeans got the same shock as corn with acres coming in at the low end of estimates and stocks near the average guess. Soybean acreage was forecast at 87.6 million acres vs. 90 million acres estimated. An acreage number of this size is the third-highest on record, but we need more to avoid further tightening on the balance sheet. Last year we planted 83.1 million acres. The forecast is 2.4 million acres less than what the USDA used at the February Outlook Forum. The combined corn and soybean acreage number is still the second-largest on record.

Soybean stocks as of March 1 were 1.564 billion bushels. This is the lowest stocks number on March 1 in the last five years. The average estimate was 1.534 billion bushels and last year we had 2.255 billion bushels available.

Soybean acres in Minnesota are estimated to be up 400,000 this year to 7.8 million acres, Illinois up 400,000 at 10.7 million, Iowa up 400,000 at 9.8 million, Indiana up 100,000 at 5.8 million, Missouri down 50,000 at 5.8 million, Nebraska up 300,000 at 5.5 million, North Dakota up 1.25 million at 7 million, and South Dakota up 750,000 to a record 5.7 million acres. This is the ninth time in 11 years the acreage number has come in less than the trade estimate. The March to June acreage number has increased in seven of the last 10 years, so there’s a slight correlation for this year’s intentions.

Regarding the stocks number, it was slightly higher than the trade projection. On-farm stocks were just 594 million bushels or 38 percent of total stocks, near the lowest percentage on record and compared to 45 percent last year. Off-farm stocks of 970 million at 62 percent of the total is the largest percentage on record. Last year, we had just over 1 billion total bushels on hand as of March 1. This year’s stocks decline was focused in Iowa and Illinois where their combined year-on-year decline accounted for 42 percent of the national drop. If you need to buy soybeans, you will have to pull them out of commercials’ hands where most stocks reside.

Weekly export sales were at the lower end of expectations at 3.9 million bushels. Total commitments stand at 2.235 billion bushels or 99.3 percent of the USDA’s 2.25 billion bushel export forecast. New crop sales were 4.8 million bushels. New crop commitments at 193.7 million are head and shoulders above last year’s 19.4 million bushels. The February National Agriculture Statistics Service Oilseed Crush report was 164.3 million bushels vs. 165.1 million bushels expected. This was the smallest monthly crush number since September 2019. Soyoil stocks were 2.309 billion pounds compared to estimates for 2.253 billion pounds. Outlook: The market’s job is to increase planting intentions, reduce usage, and pull inventories to the market. Weather conditions for spring planting will be closely monitored as we can’t afford any glitches anywhere this year. Using this week’s numbers, private estimates for next year’s carryout plunges to an untenable sub-100 million bushels (some as low as 25 million bushels). Buckle up boys and girls, we’re in for a bumpy ride!

May soybeans failed to set a new contract high while most of the other months did in post-report trading. For the week, May soybeans were up 1.5 cents at $14.02, July was 5.5 cents higher at $13.96.75 (new contract high at $14.48.25), and November rocketed 56.5 cents higher to $12.63.75 per bushel (new contract high at $12.85).

Nystrom’s notes: Contract changes for the week as of the close on April 1: Chicago wheat fell 2.25 cents to $6.11, Kansas City was 3.25 cents lower at $5.65, and Minneapolis dropped 14.5 cents to $5.99.5 per bushel. The USDA reports were considered neutral to wheat with March 1 stocks at 1.324 billion bushels vs. 1.278 billion estimated. Global weather is seen as improving wheat development. v

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Micro-grants available to horse owners

The Minnesota Horse Welfare Coalition’s mission is to keep Minnesota’s horses safe at home. The MNHWC provides access to resources before circumstances reach a crisis which endangers the wellbeing of the horse.

The MNHWC provides direct assistance to Minnesota horse owners experiencing temporary hardships and faced with competing priorities to maintain their horse or, as a last resort, refer horses to equine welfare and rescue members for rehoming assistance. The MNHWC offers micro-grants of up to $500 per horse to help with veterinarian and farrier expenses, castration, feed and hay support, transportation for rehoming, medications and deworming.

Minnesota horse owners who need help can apply online at https://www.minnesotahorsewelfare. org/apply-for-assistance. If awarded, grants are paid directly to the service provider by the MNHWC.

For more information, visit the MNHWC website https://www.minnesotahorsewelfare.org.

This article was submitted by University of Minnesota Extension. v

MIELKE, from pg. 18

per pound. This is up 2 cents on the week and the highest it has been since Jan. 20, and was 32.75 cents above a year ago. Eight cars were traded on the week.

CME dry whey set another CME record high on March 31 and stayed there throughout the next day to close at 66 cents per pound. This is up 3.25 cents on the week and 33 cents above a year ago. There were four sales recorded for the week.

Dairy webinar on digital technologies

Join Dairy Cattle Reproduction Council for a webinar on May 13, starting at 2 p.m. Ricardo Chebel, University of Florida College of Veterinary Medicine associate professor, will address “Using digital technology to optimize health and reproductive management.” The one-hour webinar is free.

The webinar will present a review of available health sensor technologies; explain how to use data to help enhance dairy cattle repro programs; and present recommendations on what to look for in a sensor technology system.

To register for this webinar, go to http://bit.ly/ DCRCmay13webinar and follow the prompts. If you are a DCRC member and cannot attend the live program, you may access the webinar at www.dcrcouncil.org after May 27.

For more information, e-mail Luciano Caixeta at lcaixeta@umn.edu or e-mail DCRC at jodee@ dcrcouncil.org.

This article was submitted by the Dairy Cattle Reproduction Council. v

USDA seeks virtual input on programs

The U.S. Department of Agriculture’s National Agricultural Statistics Service will hold its biannual Data Users’ Meeting virtually April 14 and 15 from 11 a.m.-2 p.m. The meeting is free and open to the public.

The Data Users’ Meeting shares recent and pending statistical program changes, soliciting input on these and other programs important to agriculture.

The April 14 agenda includes agency updates followed by several breakout sessions for participants to choose from, including AMS Market News; World Board Meteorology; NASS Grain Stocks Program; and Foreign Production, Trade, and Import/Export Data.

On April 15, after a brief recap of the previous day’s

activities, the floor will open to participants for questions and comments, and the event will close with two breakout sessions: NASS Modernization and ERS Research. Anyone interested in participating in the Spring 2021 Virtual Data Users’ Meeting should register online at www.nass.usda.gov/Education_and_ Outreach/Meeting/. Links to this Zoom meeting will be emailed to participants after registration. Summaries of previous meetings are available on the same webpage. For more information, contact Marisa Reuber at Marisa.Reuber@usda.gov or (202) 690-3099. This article was submitted by the U.S. Department of Agriculture. v Grazing assistance offered to select counties

The Sustainable Farming Association, in partnership with the National Fish and Wildlife Foundation, is working to increase and improve the amount of regenerative grazing within the prairie pothole region of west and northwest Minnesota.

The new Technical Assistance for Grazing program aims to provide technical assistance to 20 graziers in this region. Participants in the program will receive an on-farm assessment of their operation; development of a grazing plan; training on adaptive grazing, fencing techniques and equipment; stockmanship training; implementation of soil health principles; and networking opportunities with other graziers

The program is designed to offer one-on-one boots on the ground training to farmers wanting to begin, improve upon, or expand their grazing enterprise. Over two years participants will work one-on-one with our SFA staff and participate in field days where they will learn from and interact with other graziers in this program.

The program covers Becker, Benton, Cass, Clay, Clearwater, Crow Wing, Hubbard, Kittson, Mahnomen, Marshall, Morrison, Norman, Ottertail, Pennington, Polk, Red Lake, Roseau, Stearns, Todd and Wadena counties.

Those who would like to participate and improve their grazing management should contact the SFA Soil Health Lead, Jared Luhman, at (507) 271-5968 or jared@sfa-mn.org. They can also apply online at http://bit.ly/sfagrazingapplication.

This article was submitted by the Sustainable Farming Association. v n

Exports are moving again now that the stuck cargo ship in the Suez Canal has been freed. The canal is a busy one. About 30 percent of the world’s shipping container volume moves through the 120 mile canal daily, according to Maersk, a Danish integrated shipping company which has been the world’s largest since 1996.

There seems to be no end to money from Uncle Sam to offset the effects of Covid-19. We talked about it in the April 5 “Dairy Radio Now” broadcast with Matt Gould, analyst and editor of the Dairy and Food Market Analyst newsletter. Gould said USDA provided an update on its plan for Covid relief but, with respect to dairy, “They left us with as many questions as we probably had before.”

Starting with the Food Box program, which successfully lifted cheese prices last year, we know it will end at the end of April, Gould said. However, we don’t know what will happen then.

They also left open-ended the possibility of any future direct payments to dairy farmers or dairy processors or any new programs. That said, Gould reported the USDA has stated it will implement a $400 million dairy donation program, which was funded in the stimulus bill passed last December.

They will also reopen the Coronavirus Food Assistance program II payments for dairy farmers who may have missed the deadline the last time around.

A lot of details are not available yet, he said, but he expects some pretty material changes in policy from the new administration. He believes there will be a bigger emphasis on trade agreements and be more trade friendly compared to the Trump Administration. However, in terms of direct payments, farmers probably fared better under Trump than they will under the Biden Administration.

Cooperatives Working Together member cooperatives accepted 14 offers of export assistance this week which helped them capture sales of 354,958 pounds of cheddar cheese, 408,958 pounds of butter, and 374,786 pounds of cream cheese. The product is going to customers in Asia, North Africa and Oceania from April through August.

CWT’s year-to-date export sales now total 11.56 million pounds of American-type cheeses, 8.757 million pounds of butter (82 percent milkfat), 3.649 million pounds of anhydrous milkfat, 13.54 million pounds of whole milk powder, and 4.239 million pounds of cream cheese. The products are going to 26 countries in six regions and are the equivalent of 534.9 million pounds of milk on a milkfat basis, according to CWT.

Lee Mielke is a syndicated columnist who resides in Everson, Wash. His weekly column is featured in newspapers across the country and he may be reached at lkmielke@juno.com.