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Farmers Grain Market Letter  10/10/14 2:11:53 PM Printer Friendly VersionPrinter Friendly Version

Market Letter
10/10/2014

 
  
 
2015
                Just the thought of the coming year seems to bring anxiety to farmers everywhere.  There are many questions that need to be answered, as we prepare to finish this 2014 crop and make plans for the next one.  What does the new Farm Bill have that best suits my operation?  And what decisions are mine?  And what decisions are my landlord’s?  How long can I wait to make my decision?  What crops stand to make the most profit in my operation?  Do I continue to pour maximum inputs into making maximum yields?  How long before prices turn higher?  What price levels can we expect this next year?  But doing NOTHING is not an option.  Call FGT to discuss your marketing needs and plans.  That helps us prepare to handle what you grow.
 
Farm Bill
                Ag Secretary Vilsack announced decision dates on the 2014 farm bill recently.
 
· September 29 - February 27 to re-allocate Base Acres and update Payment Yields
 
· November 17 - March 31 to elect Price Loss Coverage (PLC) or Ag Risk Coverage (ARC)
 
            It appears that waiting until the last minute is prudent in this case, as you want to learn and look at as much information as possible before making your decision.  Once it is made, you better be prepared to live with those decisions for the next 5 years.  There are several tools available that were developed by leading universities, which can be found at www.usda.gov/.
            When Congress passed the 2014 Farm Bill early this year, one of the intents of the program was to “decouple” payments from planting decisions.  Payments are calculated by using “base acres” for PLC or ARC, not planted acres.  But, cotton is “generic” each year.  This is why it is so important to make base acre re-allocation decisions that you can live with through 2018.
            Who is responsible for making these decisions?
· Base Acre re-allocation and Payment Yield updates are the responsibility of the landlord.
 
· PLC or ARC election will be decided by all the current producers on the farm as of September 30, 2014 (includes owners with crop shares).
Crop Choices
            Some say it is football season...some say it is hunting season...but for most farmers, it is Banker season. It is the time to sit down and tally up the past year.  See what worked and what didn’t work so well.  What made money and what didn’t.  The Ag Lender is preparing for your visit...you need to prepare, also..
            The value of hindsight is, we get to beat ourselves up for all the things we didn’t do, that we should have; as well as the things we did do that we shouldn’t have.  Example: What was so wrong about selling crops (2014 or 2015) during the Planting rally this past May?
            Cash prices for grains were as follows:
 
                                    2014                2015
· Soybeans (Nov)        $12.50 (+)         $11.50 (+)
· Corn (Sept)               $4.50 (+)          $4.40 (+)
· Wheat (July)             $6.00 (+) spot   $6.50 (+)
 
            The USDA Supply and Demand Report came in within trade expectations. Our focus now is South American planting progress and weather, as well as global demand.
 
Rice
 
            The October Supply / Demand reports major change this month was an increase of yield of 83lb per acre.  That increased the supply side of the balance sheet 1.7 ml cwts.  With no change to use, Ending Stocks were increased by the same 1.7 ml cwts.
            Rough rice export sales are off to a good start, with Venezuela the biggest buyer lately.  The most recent weekly export sales report was the strongest of the season so far at 120,000 mt.  Barge freight has been tremendously high at times this harvest season.  This no doubt has negatively impacted prices.  A strong U.S. dollar is also a negative at this time.
            U.S. rough rice export prices remain competitively priced compared to our South American competitors.      
Our problem in the industry is that we are not moving enough milled rice into export market.  The Iraqi business, or lack thereof, has been a big disappointment.  We seem to get close to getting some of the business, but we continue to get beat out by, in some cases very small sums per ton.  It appears at times that the playing field may not be level for all players.  Iraq, lately, continues to cancel tenders.  In regards to what is going on in Iraq now with ISIS, etc., who knows how this market plays out.   
            The U.S. has a large crop to dispose of and we need both rough rice and milled rice exports humming early and steady.
            One interesting potentially positive situation lies with India.  India has passed a “Food Security Act” that is supposed to begin this fall.  Basically, the Indian government would give those qualifying 11lbs of rice and/or wheat each month.  With the amount of poor in India, that could be a significant amount of tonnage, 
 
The Lighter Side
 
            At a motivational seminar, 3 men are asked to come up to the stage.
            They are all asked, “When you are in your casket and friends and family are mourning upon you, what would you like to hear them say about you?
            The first guy says, “I would like to hear them say that I was the great doctor of my time, and a great family man/”
            The second guy says, “I would like to hear that I was a wonderful husband and a school teacher who made a huge difference in our children of tomorrow.”
            The last guy replies, “I would like to hear them say…..LOOK!!! HE”S MOVING!!!”
 
Sights and Sounds
 
            SEC, SEC, SEC
            Game Day Back-to-Back
            Hotty Toddy Red & Blue
            Hail State Maroon & White
            M-I-S—S-I-S—S-I-P-P-I
            A Great State to Call “Home”
 
Quote
 
                                      Jude 1:17-23
 But you must remember, beloved, the predictions of the apostles of our Lord Jesus Christ.  They said to you, "In the last time there will be scoffers, following their own ungodly passions."  It is these who cause divisions, worldly people, devoid of the Spirit.  But you, beloved, building yourselves up in your most holy faith and praying in the Holy Spirit, keep yourselves in the love of God, waiting for the mercy of our Lord Jesus Christ that leads to eternal life.  And have mercy on those who doubt; save others by snatching them out of the fire; to others show mercy with fear, hating even the garment stained by the flesh.
 FGT News
 
            FGT Connect—Want an easy way to check your contracts, deliveries, settlements, and prices—at your convenience 24/7?  Now you have it.  To provide you with even better service and convenience, FGT has replaced our online Member Login with our new and improved online service, ‘FGT Connect’.  With this new service, you now have total account access through a computer or mobile device.  You received a letter in the mail to help you sign up and use the new system.  If you have any questions, call Brian or Will at 662-332-0987.
 
            The Need for Speed—The addition of outbound truck scales at Mound, Waverly, and Waterproof, along with new traffic flow patterns and tweaks to other receiving processes across our facilities, helped FGT receive record numbers of trucks per day at most locations this harvest.  River levels on the Yazoo allowed us to load barges at Belzoni for the first time since 2004.  New storage at Greenville and Mound is in use now, and Indianola should be ready before harvest is over.  Greenwood is more efficient than ever, and the paint job looks great too.  Lake Village loaded barges round the clock; Hollandale handled the milo crop; and our operation at the Port of Rosedale exceeded expectations, providing all customers in that area the competitive benefits of a strong FGT cooperative market presence, with patronage rebates as a bonus.  More improvements are coming in 2015.
 
Binned Grain—We want to buy your binned grain.  Please call FGT for prices and shipping assistance.  Binned grain is eligible for rebates too.  January 2015 rebates will average 23 cents per bushel, which also happens to be our three year average.  That’s 23 cents you missed on anything you sold outside of FGT.
 
Wheat—We’re back in the wheat business.  FGT suspended receiving wheat during corn/bean/rice harvest, and will restart November 1st in Greenville, Greenwood, and Waterproof.  We want to buy your bin-stored wheat.  Remember to keep the bugs under control.
 
Flatbed Trucks—FGT no longer lifts trucks at any of its elevators.
 
FGT’s Grain Bookkeepers are in Greenville, MS and Mound, LA:
Selina Tarver & Jennifer Lyons cover Greenville, Lake Village, Indianola, Greenwood, Belzoni, Hollandale, and Rosedale.
Lori Deckelman, Charity Kidrick, & Jane Lopez cover Mound, Waverly, and Waterproof.
These five ladies have over 55 years’ experience in taking care of your grain bookkeeping needs—tickets, contracts, settlements, load summaries, etc.  We are proud that they work for FGT.  And yes, they started when they were 12.
           
 
 
 
 
 
 
 
 
 
 
 
 
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