Posted: Tuesday, August 19, 2014
U.S. Farmers Are Up to Their Ears in Corn
Copyright 2014 Dow Jones and Company
By TONY C. DREIBUS and JESSE NEWMAN
August 17, 2014
"We're going to drown in corn this year."
The assessment, from Jeff Brown, 45 years old, a fifth-generation farmer outside Decatur, Ill., sums up the view of most people who grow, trade or process corn as they brace for another record U.S. harvest.
Months of wet weather have fueled expectations for a corn crop so large that mounds of the grain will be a common sight across the Midwest after the harvest, which starts next month.
The U.S. Agriculture Department projected last week that production will exceed 14 billion bushels, topping last year's historic harvest.
Many analysts think this week's closely watched Pro Farmer crop tour will offer further evidence of a remarkably healthy crop, and that demand isn't likely to rise enough to offset the sharp increase in supply.
The drop in corn prices could benefit consumers by curbing inflation in grocery-store products that contain the ingredient, like cereals and cookies, though analysts expect few packaged-food companies to make significant price cuts.
Expectations of a glut have driven corn prices down by 13% this year, to near four-year lows, after a 40% decrease last year. September futures, the front-month contract, rose 1% to $3.6575 a bushel on Friday on the Chicago Board of Trade. Contracts for December delivery, after the harvest, settled 0.7% higher at $3.7625 a bushel.
The steep price declines have kindled hopes among some producers that bargain-seeking buyers could ratchet up purchases. But a close look at key consumers of corn suggests significant constraints to how much demand could pick up, even with the grain so cheap.
A decline in livestock herds means there are fewer animals in the U.S. to feed, and U.S. demand for ethanol—a corn-based additive to gasoline—is pushing a government-set cap. http://www.foodmarket.com/newsemail.asp?key=940975
they have stated before that they were loooking to acquire companies when that is announced thr stock will probaly drop iy may be a buying opportunity then
HEN: SWEET!! But just remember: WHEN MARGINS ARE HIGH....SOME small processor starts increasing PRODUCTION....Then dock prices ERODE...then We start another SLIDE.... JUST WAIT & WATCH!! Wildman. PS. HEDGE BABY HEDGE!! Wm.
Sentiment: Strong Sell
isold at 28.7 made alot bought at 7.15 . if the stock drops 25-26 range or lower ill buy in again corn prices are at at a all time low profit margins sre probably terrific
HEN: YOU HAVE BEEN POSTING...Quite a WHILE.... You know what BLACK OUT Periods are.. The CFO had a "APPROVED SLOT" to dispose of SOME Shares... He sold near a 52 week high...I am sure he figured his tax angles carefully... From here on We are on a PREDICTABLE slope...Margins will decrease... our Share price will "DROOP" until the next positive NEWS....Wildman.
Sentiment: Strong Sell
CREW: I BEEN RELAXING!! I hope the "ROLLER COASTER RIDE" Was not ....A HEART BREAKER!!.... I have warned THE MARKET IS HIGH!! THE WORLD is VERY UNSTABLE.....ASK YOUR SELFS.... With Chicken profits HIGH what is holding increased POULTRY production IN CHECK??....The tell will sneak in..... SOMEBODY will increase their "PULLET??" order & begin to:... prepare to:...... increase EGG--SETS.....Then the FAT will hit the FIRE!!! Crew & LURKERS....there has to be a REASON for our STOCK PRICE...to maintain these levels..... JBS could continue to build cash reserves.... But is anything DECENT going to be fer sale???....I have heard TYSON is selling some under performing DIVISIONS.... I hope PPC buys wisely..... IMHO this poultry cycle is near its PEAK...... BWTFDIRK???? LIMIT YOUR RISK!! Wildman.
Sentiment: Strong Sell
Posted: Tuesday, August 05, 2014
Crop Development Excelling; Futures Continue Downward Trend
In its latest Crop Progress report, the USDA shows that 93% of the corn crop is in fair to excellent condition as of August 3rd. 94% of soybeans are also in fair to excellent condition.
Corn silking is 90% complete as of the report, up from just 78% the week prior and two percentage points ahead of the 5-year average. Corn dough nearly doubled last week's progress and is now at 36%.
September corn settled slightly higher on Monday at the CME, at $3.58 ¾ per bushel. December corn was also up to $3.69 ¼. In early Tuesday trading, both contracts are trading lower, with September at $3.55 ¼ and December at $3.65 ½.
Soybeans are trading lower so far Tuesday morning, with September at $10.78 ¼ and November at $10.63.
Soybeans in bloom are at 85%, just ahead of the 5-year average of 83%. Setting pod progress is impressively at 57%, compared to 38% the previous week and a 5 year average of 48%.
Scattered showers throughout the corn belt and parts of the plains are expected this week. The northern corn belt may have some cooler temperatures this week, while in the south it's mostly dry and warm weather to further crop development.
From the August 1 dailylivestockreport … a must read.
- Low cow numbers
- $400 plus cow calf returns, more than twice any year in the last 25
- Better pasture quality
And yet heifer retention is at the lowest level in 25 years.
It would appear beef prices will remain high for quite some time. With only modest increases in chicken supply expected …. Looks to me like protein producers will do just fine over the next year. Producers … not necessarily processors … but producers … think PPC, SAFM and maybe SEB. TSN has smoothed out their earnings to much and will be doing some discounting the next two quarters so they may not be in a position to capture those huge margins that PPC and SAFM may be getting for a while.
Stephens bumped up 2014 earnings from 2.00 to 2.35. 2015 from 1.90 to 2.20. left stock at equal weight and did not move price target (30) on better than 15% earnings earnings bumps for both years. very strange.
yesterday was huge over reaction. with free cash flow like ppc is generating - good things will happen.
CREW: I HAVE BEEN WARNING YOU!! THIS MARKET....Is bouncing on "HOT AIR"....Hopes & FEARS!! But not DREAMS !! INFORMATION & FACTS are fuel / AMMO. PPC 52 week LOW was $13.67 OUR HIGH was $32.11... YOU had your CHANCE... We will not BREAK $31.00 again until ....POSSIBLY.....OCTOBER. ??? Remember Profit margins are derived from FEED COSTS...& OVERALL SALES.... We are now SET FOR SUMMER... But SET UP FOR THOSE BLASTED CORN CROP... HARVEST SIZE RUMORS... Be glad We are still in a DROUGHT BEEF is still EXTREMLY high.... We HAVE a GREAT year AHEAD... But YOUR BEST EXIT POINT has PASSED!! KEEP your EYES on the EGG-SET Numbers... They increase We go Down.... BWTFDIRK ?.....Wildman.
Sentiment: Strong Sell