Blogging by the Bushel
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Archive for February, 2012

It almost seems as if the USDA got together with the consensus to amend their differences as USDA forecasted supplies for corn, soybean, and wheat are in line with the analysts. South America and Russia continue to be on everyone’s radar as yields in South America and government involvement from Russia could affect the grain markets.

Corn
The USDA projected U.S. corn exports at 50 million bushels higher due to an increase in sales and shipments and a decrease in Argentina’s supplies. 2011/12 U.S. ending stocks are projected at 801 million bushels, a 45 million bushel decrease from last month. The USDA narrowed the forecasted season-average farm price by $0.10 on both ends of the range to $5.80 to $6.60 per bushel. The forecasted stocks to use ratio was lowered to 6.3% compared to 6.7% last month and well below the 5-yr average of 12.0%. 2011/12 global coarse grain supplies are decreased by 3.1 million tons reflecting reduced corn production in Argentina and Paraguay. Argentina corn production is lowered by 4 million tons to 22 million, and Paraguay’s production is lowered by 0.4 million tons. We will continue to watch Argentina’s corn production as La Niña weather patterns of extreme heat reduce yield prospects. Although Argentina has seen recent rain, extensive heat during pollination in December and January has caused irreversible damage to the early corn. 

Soybeans
U.S. soybean exports are projected 226 million bushels lower than last year, but unchanged from last month at 1.275 billion bushels. 2011/12 ending stocks are unchanged at  275 million bushels. The U.S. season-average price range for 2011/12 was narrowed to $11.10 to $12.30 per bushel compared to $10.95 to $12.45 last month. Global oilseed production for 2011/12 is projected down 4.9 million tons to 257 million tons due to lower production forecasts for South America.

Wheat
U.S. wheat ending stocks for 2011/12 are projected 25 million bushels lower to 845 million bushels. Exports are increased by 25 million bushels due to strong sales, strong shipments, and competitively priced feed. The season-average price is raised $0.20 at the bottom end to $7.15 to $7.45 per bushel. Global wheat supplies for 2011/12 are projected 2.1 million tons higher due to increased beginning stocks in Kazakhstan and increased production for India, Kazakhstan, and Morocco.  We will be closely watching Russia as their supply of wheat dwindles which could result in their government shutting down exports for the second time in two years.

Overview

Moving forward, the grain markets will be closely watching South America’s corn and soybean production and how La Niña weather patterns will affect yields.

The Punxsutawney Groundhog Club made their decree Thursday morning in central Pennsylvania: Punxsutawney Phil saw his shadow, and there’ll be six more weeks of winter. The announcement was met with boos from the enormous crowd gathered in Punxsutawney.  

Folks in the East and elsewhere gave a collective shrug, as temperatures have been unseasonably warm. “But it’s the winter we’ve been having, so that’s like spring anyway,” said Matt Lauer on TODAY after the news broke. 

“The daffodils are already in bloom in NW Mississippi,” wrote Jackie Barnes Garrett on TODAY’s Facebook page, where hundreds of people are weighing in. “We are already fighting mosquitoes and flies.”

“Yesterday it was almost 60 degrees in Iowa,” wrote Facebook commenter Letha Ann Alexander. But Sara LaPoint, from Colorado, has seen enough of this season. “I am SO done with snow and winter!” she wrote.

The Associated Press reports that the groundhog has seen his shadow 99 times since 1886; he’s not seen it only 16 times, according to the Groundhog Club’s Inner Circle (there are no records for the remaining years, according to the AP). Though Phil gets all the credit, it’s 15 members of the Inner Circle who decide the news in advance.

 

And not everyone believes the hype. “Punxsutawney Phil is a punk when it comes to weather forecasting,” wrote veteran meteorologist Tim McGill on the Chicago Weather Center blog. McGill, who has covered 26 years of Phil predictions, said most weather experts “dread Groundhog Day.” (For good measure, he ended his post with a recipe for woodchuck stew).

 

But Mike Johnston, vice president of the Inner Circle, told the AP that Phil has “never been wrong.” The reason is simple, he said: Phil can’t err, because he never applies his prognostication to a specific place. “I guarantee you someone’s going to have six more weeks of winter,” he said. 

I personally don’t know if Phil knows weather, but that furry little meatball Phil is adorable.

Since the weather has been very spring like  lately,  I couldn’t resist posting this picture.

SPRING IS JUST AROUND THE CORNER