Market Situation
Crop Progress. Feed grain harvest is just about complete with sorghum now at 98% harvested.
Grain Use. Grain use reports released last week were positive for feed grain consumption.
In last week’s export sales report, corn exports were 80 million bushels, more than twice the 29 million bushel pace needed to reach USDA’s marketing year export sales target of 1.800 billion.
Sorghum sales commitments of 6 million bushels were above the 4 million bushel pace required to reach the export target of 325 million bushels.
The ethanol production numbers from the Energy Information Administration as of last Wednesday show a new record for ethanol production, 42.336 million gallons per day for the week of November 21. This beats the old record of 41.748 million gallons set last June 19th.
Broiler chick placements were up this week, above year ago levels for the first time since October 3rd. For the week ending November 21st, 161 million broiler chicks were placed, up 1% compared to last year and up 2% compared to average.
Outside Markets. The European Central Bank meets on Thursday and is expected to expand its economic stimulus package designed to provide incentives to increase lending and nudge inflation back up to its target of just under 2%.
Conversely, it is more widely expected that the U.S. Federal Reserve may be ready to start raising interest rates in response to recent positive reports related to unemployment and inflation. Fed Chair Janet Yellen is scheduled to offer her testimony on the economy before the Joint Economic Congressional Committee Thursday and the November jobs report comes out on Friday.
Marketing Strategies
2016 Feed Grain Marketing Plan. I completed all sales of the 2015 crop at harvest and am now preparing my marketing plan for 2016. I will again break up sales over 4 pre-harvest time periods and the final 20% at harvest. My early budget projections show a breakeven price of corn of $4.13 and $4.08 for grain sorghum.
Prices on the 2016 December corn contract are trying to hold at the low set in early September. There appears little on the horizon to suggest a significant increase in corn acres for 2016 so I expect much of the production discussion to focus on yield. The forecast is for the current El Nino weather pattern to peak by the end of the year and end by early summer (see today’s Wheat Outlook). A state of flux in a major weather phenomenon during the corn growing season may provide marketing opportunities in the spring.
Upcoming Reports/Events.
December 8 – Short-term Energy Outlook
December 9 – Crop Production; WASDE
December 18 – Cattle on Feed
December 23 – Quarterly Hogs and Pigs
January 10-16 – TEPAP (The Executive Program for Agricultural Producers), Unit I is full but space remains for Unit II, here
January 12 – Crop Production; WASDE; Grain Stocks; Winter Wheat Seedings
January 20-March 3 – Master Marketer, Abilene, Texas. Registration is now open, here
