WILLAg Newsletter | February 18, 2018

February 18, 2018

The CME Group commodity markets are closed Monday in observance of President’s Day.

Last week I ignored the markets, mostly. My wife and I took some time to visit Savannah, Georgia. However, we still managed to find a way to incorporate corn & soybeans into our lives. I can remember taking a vacation in the late 1970’s with mom and dad to Estes Park in the Rocky Mountains. We went the long way through Iowa that summer so dad could get a look at the corn crop.

Naturally, there isn’t a corn crop to look at the United States right now so Claranne and I did the next best thing. We stopped in Kentucky where bourbon is made from corn, and then spent about an hour looking for a sign commemorating the place where the soybean was first introduced into North America. That is outside of Savannah. Both are chronicled here.

Don’t forget to buy your ticket for the All Day Ag Outlook. It is Tuesday, March 6, 2018. The markets are getting more interesting, and so are the agricul…

WILLAg Newsletter | February 11, 2018

February 11, 2018

Last Thursday USDA released the monthly World Agricultural Supply and Demand Estimates report. It increased U.S. corn exports for this fiscal year by 125 million bushels. It is a very large change. A rough rule of thumb is that every 100 million bushel change is worth about a dime in the market when prices are at mid-point (say $4.50 for corn). The 10 cent move is relative to the old mid-point at the lower plateau and we really haven’t been in the new era long enough to know if this amount has expanded to say to 15, 18, or 20 cents or if it is still 10 cents per 100 million. None-the-less 100 million bushels is a big move.

However, the further you are from the mid-point the less the bushel change is worth. Consequently the 125 million bushel change on Thursday was only worth a couple of cents to the upside.
Soybeans are a more interesting story. USDA added 60 million bushels to U.S. ending stocks taking them from 470 million bushels to 530 million. Do you remember wh…

WILLAg Newsletter | February 4, 2018

February 4, 2018

There are three items of importance you should know about this week. First, lead and new crop corn, soybean, and wheat futures all finished January higher. Second, the tax law, if not changed, will impact grain marketing & farm income. Third, the annual All Day Ag Outlook is Tuesday, March 6 at the Beef House.

Honestly, all of those things are positive for farmers. However - isn’t there always a but ;-) - moving higher from such low levels may only serve to partially mitigate a not so great income year in 2017 and do very little about 2018. Oh, and Congress is working pretty hard to figure out a way to fix that “if you market your grain through a cooperative just don’t disclose 20% of the gross sales on your income taxes” loophole (listen to Commodity Week).

The good news is the All Day Ag Outlook is only a month away and the tickets are still just $30. Buy your ticket now.

Thank you for supporting WILLAg programming!
Todd Gleason

P.S. March corn futures posted a …

Soil & Water Management Webinar for Certified Crop Advisors

earn 4.5 hard to get Soil & Water Management CEU’sCertified Crop Advisors in the state of Illinois looking for the hard to get Soil and Water Management credits should registered today for a University of Ilinois Extension Webinar. The soil and water management webinar will be held February 20 at locations around the state. Crop Advisors can earn 4.5 CEU’s, or Continuing Education Units, by attending. The cost is $45 and includes lunch and snack. The program runs from 9 to 2 Tuesday, February 20th. Check with your local Illinois Extension office for complete details.

Renovating Downtown Milford, Illinois

A local farmer has taken it upon herself to renovate some of the buildings in downtown Milford, Illinois. Farm Broadcaster Todd Gleason has this interview with Colleen Caldwell of Town & Country Events. Gleason met her while emceeing a crop insurance meeting in late January.

Above Trend Yields or Higher Prices Needed to Break-Even in 2018

read farmdocDaily article

Farmers figuring crop budgets for this year will face an uncomfortable reality. In order to break-even on cash rented land, generally speaking, it will require above trend yields, higher prices, or some combination of the two.

2018 is shaping up very much like the last two years says University of Illinois Agricultural Economist Gary Schnitkey. Each of them began with dire price and income outlooks. Higher than average trend yields financially salvaged what were expected to be very poor seasons on highly productive soils in central Illinois. FBFM (Farm Business Farm Management) records show farmers in this area of the state harvested 228 bushel corn and 69 bushel soybeans on average in 2016 and, while the numbers have not yet been fully summarized, project 2017 yields at 221 and 68.

Since 2012 corn and soybean yields in central Illinois have been at or above trend. The weather and management will need to produce another year of above-trend yields in order for…

WILLAg Newsletter | January 28, 2018

January 28, 2018

It was a pretty good week for corn and soybean futures in Chicago. However, given the last six months of trade that’s not a huge accomplishment.

Presented below you’ll see two thoughts on where the markets might be headed. “Bad Weather Rising” lays out Scott Irwin’s longer term contrarian view. He’s of the opinion the markets over the next five years will reflect a higher mid-point. Irwin’s colleague at the University of Illinois, Todd Hubbs, takes the shorter term ‘marketing view’. His price outlook is less attractive. Again, one view is long-term and the other is short-term. Both have implications for farm and marketing decisions.
Further down in this letter you’ll find an article reposted from farmdocDaily. In it Iowa State’s Keri Jacobs details how the new tax law will impact grain marketing. You’ve likely heard a great deal about the 20% tax break farmers will receive if the first sale of their grain goes through a cooperative. Jacobs offers insight into how this…

Can Corn Prices Get Above the Current Range

read the farmdocDaily articleMarch corn futures continue to trade between $3.48 and $3.60. This has been the case since the release of the November USDA supply and demand tables. It continues today despite the bearish information contained in USDA’s end of year reports released January 12. Todd Hubbs says corn prices continue to stay in relatively narrow range, and that pattern may remain for the next several weeks.
Listen to Todd Hubbs discussion of his farmdocDaily article with Univesity of Illinois Farm Broadcaster Todd GleasonThe University of Illinois grain markets specialist says the present outlook projects ample corn supplies in 2018. This will likely keep corn prices in the current range until information on spring planting is released. USDA’s Prospective Plantings report is due March 29th. Hubbs says a typical price pattern suggests a price rally in late spring or early summer associated with a weather issue. Summer weather and the impact it has on corn production will eventu…

Bad Weather Rising

An agricultural economist at the University of Illinois is looking for a long-term recovery in the commodity markets. Commodity prices have been low since 2014, but the price of farmland has remained fairly strong. This is an indication thinks University of Illinois’ Scott Irwin that those buying farmland believe his contrarian view that prices will recover say to $4.00 for corn, $10.75 for soybeans, and $4.75 for all wheat. That’s at least one way to reconcile the firmness of land values. These long-run investors, whether they be farmers or outside investors, are looking for higher averages to restore profitability. Irwin says there are two reasons for commodity prices to increase. One of them is slow. It’s the return of better economic conditions across the planet. The other he says is fast and violent, “I think it will be a series, in a fairly short period of time, of really poor weather that will be the big event that pulls us out.” The ag economist is looking for the return of a …

WILLAg Newsletter | January 20, 2018

January 18, 2018 If you’ve been listening to the daily Closing Market Report you’ll know that many of the analysts have been on the road for the winter meeting circuit. I hope you get a chance to catch up with some of them or maybe me. I’ll be out next week with the folks from Farm Credit Illinois. You may see the dates and times here. These are crop insurance and marketing meetings. Strategic Farm Marketing will be doing a similar program. You may see their winter meeting list later in this letter. The farmdoc team will be out, too. Although that’ll happen in mid-February. Registration is already open for the “2018 Resilient Farm Roadshow | Building habits to become profitable Farm Managers”. If you or your organization is still planning an event contact me at (217) 333–9697 or I’ll be glad to talk with about bringing a WILLAg Marketing Panel to your meeting. Or if you’d prefer, just to give you the contact information for the University of Illinois ag economi…