Spud growers reduce acreage on heels of big crop, low prices | capitalpress.com

Potato growers in the Northwest and throughout the U.S. have significantly reduced their acreage this season following a 2012 crop marked by overproduction and low prices, according to a USDA report released June 28.

Furthermore, potatoes prices have risen sharply during the past two weeks.

Idaho grower’s reduced their crop from 345,000 acres in 2012 to 317,000 this season. Growers in Washington cut their crop from 165,000 acres in 2012 to 160,000 acres this season, and Oregon growers, 42,000 acres in 2012, planted 40,000 acres this season. California growers increased slightly from 8,800 acres in 20123 to 9,000 acres in 2012.

Nationally, the fall potato crop was reduced from 1,001,700 acres in 2012 to 957,400 acres this season.

Dan Hargraves, executive director of Southern Idaho Potato Cooperative, said the reduction was 5,000 to 10,000 acres greater than he anticipated. He’s confident that data in the National Agricultural Statistics Service is accurate because it utilizes physical acreage counts of every Idaho field, as well as in other major potato production areas, conducted by United Potato Growers of America.

“I think (Idaho) growers did the right thing. Not only did they take out what the increase was last year, but they took out another 5,000 acres on top of that,” Hargraves said.

Growers also recently received news about inventories of the 2012 crop. Prices of 10-pound bags of medium-sized Idaho potatoes, which were mostly $3.50 to $4 at the start of June, are now mostly $6.50 to $7.50, according to USDA’s Market News Service.

“I think it really blew everyone away,” Hargraves said of the price increase. “It shows it was unwarranted to sell that crop at that low of a price. The market has finally recognized the true stocks on hand, and that’s represented in the price increase.”

Hargraves said this year’s crop of spuds appears to be in excellent condition and on track to have high quality.

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Today grain future

July Corn futures closed 12 cents higher on the day, but the SEP contract lost a quarter, and the DEC contract closed 27.5 cents lower. USDA affirmed very tight old crop stocks as of June 1 in their grain stocks report at 2.764 billion bushels vs. the average pre-report guess of 2.862 billion bushels. The acreage report was about as bearish as anyone would have expected for new crop. With an official estimate of 97.379 million acres, today’s planted acreage estimate was larger than the March planting intentions estimate. That number has been the dominant influence on price action since the report came out. The report shows NE and TX each gaining more than 300,000 acres compared to the earlier reported intentions. The IA and ND estimates each lost 200,000 corn acres from the March intentions. In the CFTC commitment of traders report released this afternoon, managed money accounts decreased their net long position in corn, by a net change of 3,704 more shorts in the reporting week ending Tuesday.

Jul 13 Corn closed at $6.79 1/4, up 12 cents,
Sep 13 Corn closed at $5.47 1/4, down 25 cents,
Dec 13 Corn closed at $5.11, down 27 1/2 cents
Mar 14 Corn closed at $5.21 3/4, down 27 1/2 cents

Soybean futures closed mixed after bouncing around wildly immediately following the report. August soybeans saw a 35 cent trading range in the first 10 minutes after the report was released. The old crop ended the day 16 cents higher, but new crop November was down more than 23 cents on the day. Pre-report trade ideas for the Planted Acreage report were centered around 77.811 million acres (ma), and the report said farmers planted or intended to plant 77.728 million acres. Missouri was reported to have gained 400K acres of soybeans since the March intentions report. The biggest loser of soybean acres was North Dakota, dropping 500K acres. The average trade estimate for US June 1 soybean stocks was 447 million bushels, and the USDA estimate was smaller, at 435 million bushels. This is the tightest June 1 stocks number since 2004. In the week after this report in 2004, July beans rallied more than 80 cents per bushel, peaking on July 7, but if the cash price for your old crop beans is priced against the August contract, a rally in the July contract doesn’t help as much as a local basis push. In the CFTC commitment of traders report released this afternoon, managed money accounts decreased their net long position in soybeans, by a net change of 6,008 more shorts.

Jul 13 Soybeans closed at $15.64 1/2, up 16 cents,
Aug 13 Soybeans closed at $14.31, down 1 1/2 cents,
Sep 13 Soybeans closed at $13.03 1/4, down 14 1/2 cents,
Nov 13 Soybeans closed at $12.52, down 23 1/4 cents,
Jul 13 Soybean Meal closed at $490.30, up $10.70,
Jul 13 Soybean Oil closed at $46.42, up $0.02

Wheat futures finished the day lower on the day. Minneapolis wheat only ended a penny and a half lower, but Chicago wheat was down 15 cents and KC wheat was a dime lower. The average pre-report trade guess for June 1 stocks was 745 million bushels, and the USDA indicated that there were 718 million bushels available on that date. The trade was looking for spring wheat acreage of around 12.1 million this morning, but the USDA report showed 12.3 million acres planted to spring wheat. Planted acres for all wheat were estimated by the USDA to be 56.5 million acres, compared to the average pre-report trade guess of 55.830 million acres. In the CFTC commitment of traders report released this afternoon, managed money accounts decreased their net short position in Chicago wheat, by a net change of 10,111 longs.

Jul 13 CBOT Wheat closed at $6.48 1/2, down 15 cents,
Jul 13 KCBT Wheat closed at $6.76 1/4, down 10 1/4 cents,
Jul 13 MGEX Wheat closed at $7.85, down 1 1/2 cents

Crops withstand weather extremes | capitalpress.com

The weather in California so far this summer has been a study in extremes, though most crops seem to be taking the fluctuations in stride.

A brief heat wave in early June gave way to milder temperatures and then a four-day rainstorm June 23-27 that would have been impressive even in February. The system dumped as much as 8 inches of rain in parts of Shasta County, said Jim Mathews, the National Weather Service’s lead forecaster here.

Now the summer heat has returned, with afternoon highs in the northern Sacramento Valley expected to remain in triple digits through most of July, according to AccuWeather’s long-range forecasts.

“It looks like we’re in for a prolonged heat wave,” Mathews said, noting that temperatures were expected to peak at 106 in Sacramento and 108 in Redding.

The federal Climate Prediction Center anticipates the summer will be warmer than normal throughout the West, where drought conditions are expected to persist. Precipitation is expected to be below normal in the Pacific Northwest and far Northern California, according to the agency.

The conditions come after low pressure over the northeastern Pacific Ocean produced a soaker that set records for this time of year in some areas. The 0.11 inches that fell at the Sacramento airport on June 25 was enough for a record for the date, Mathews said. Shasta Dam recorded more than 3 inches from June 23-26, U.S. Bureau of Reclamation spokeswoman Sheri Harral said.

“Basically we are operating everything as normal,” Harral said, adding the storm didn’t prompt additional releases from Shasta Lake. The lake was at 80 percent of average storage for this time of year as of June 28.

Crops have withstood the conditions. For instance, the rain was a benefit for olive trees, providing “a little refreshment to knock the dust off the trees,” said Adin Hester, president of the Olive Growers Council of California in Visalia.

Not enough rain fell in the Central Coast region to bother strawberries, said Chris Christian, vice president of marketing for the California Strawberry Commission in Watsonville.

“No one was expecting any real impact from it,” she said. “Now that we have unseasonably warm weather, we expect that production will pick up here quite quickly.”

Likewise, the heat could hasten development of nut crops, said Joe Connell, a University of California Cooperative Extension farm advisor in Chico.

“With almonds being used to a hot, dry climate, it probably will advance hull split, and it could accelerate pest populations,” Connell said. “As long as the growers irrigate well … we think we can handle the heat.”

2012-2013 rainfall totals

Here are the June and seasonal rainfall totals and comparisons to normal for selected California cities, according to the National Weather Service. The season ends June 30.

Redding: Month 1.58 inches (normal 0.67 inches); season 28.46 inches (normal 34.6 inches)

Eureka: Month 0.43 inches (normal 0.72 inches); season 32.31 inches (normal 40.3 inches)

Sacramento: Month 0.22 inches (normal 0.21 inches); season 15.2 inches (normal 18.52 inches)

Modesto: Month 0.07 inches (normal 0.12 inches); season 9.09 inches (normal 13.11 inches)

Salinas: Month 0.04 inches (normal 0.09 inches); season 8.97 inches (normal 12.83 inches)

Fresno: Month, trace inches (normal 0.21 inches); season 5.67 inches (normal 11.5 inches)

Reservoir levels

Here are the percentages of capacity for California reservoirs and comparisons to their seasonal averages as of midnight June 27, according to the Department of Water Resources California Data Exchange Center:

Trinity Lake: 75 percent of capacity; 86 percent of average

Shasta Lake: 66 percent; 80 percent

Lake Oroville: 73 percent; 88 percent

New Bullards Bar Reservoir: 77 percent; 89 percent

Folsom Lake: 69 percent; 81 percent

New Melones Reservoir: 52 percent; 83 percent

Millerton Lake: 78 percent; 98 percent

Pine Flat Reservoir: 37 percent; 53 percent

Lake Isabella: 16 percent; 29 percent

San Luis Reservoir: 22 percent; 32 percent

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Corn Prices Fall as Farmers Plant More – WSJ.com

Corn Prices Fall as Farmers Plant More
[image]Associated Press

The USDA estimates that U.S. farmers will plant the most acres of corn since 1936. Above, a cornfield in Illinois last month.

Corn futures prices fell Friday after the U.S. Department of Agriculture estimated that farmers would plant more corn this year than analysts had expected.

Corn acreage will total 97.4 million acres, the most since 1936 and up slightly from last year, the USDA said.

U.S. corn futures for July delivery, the front-month contract, were down 4.25 cents, or 0.6%, at $6.63 a bushel shortly after the data was released. December futures, tied to delivery of corn after this fall’s harvest, tumbled 23.5 cents, or 4.4%, at $5.15 a bushel.

The forecast surprised analysts who had expected the cold, wet spring in the Midwest to prompt many farmers to abandon plans to sow corn. Analysts on average had expected the USDA to cut its forecast for corn acreage to 95.3 million acres from the agency’s March estimate of 97.3 million acres, according to a Dow Jones Newswires survey.

“I thought it was a misprint,” said Larry Glenn, an analyst at Frontier Ag, a commodities brokerage in Quinter, Kan. “My first deal was, ‘that can’t be right’…We’re bound to be down some.”

Farmers were slow to plant corn in April and early May but began seeding the crop at a record-tying pace starting in mid-May amid warmer temperatures and lighter rain, the USDA said.

The forecast suggests that U.S. corn supplies could increase sharply if summer weather is favorable for the nation’s crop. Last year, a severe U.S. drought battered the Farm Belt, sending corn prices to a record $8.3125 a bushel on Aug. 21. But futures have fallen since then due to tepid demand from foreign importers and expectations that the U.S. could produce a record crop this fall.

The USDA said corn supplies as of June 1 totaled 2.76 billion bushels. That marked the lowest level in 16 years and was below analysts’ forecast of 2.86 billion bushels, but traders focused instead on the fact that the government didn’t reduce projected corn acreage.

The government also raised its estimate of planted soybean acreage to a record 77.7 million acres this year, up 1% from last year but still shy of expectations. Analysts expected the USDA to estimate this year’s domestic soybean plantings at 78.02 million acres, in part on the view that farmers unable to plant corn would switch to soybeans, which have a later growing season.

Soybean planting also was hindered by cool and wet weather, though “during the first part of June, conditions did allow good progress to be made in many areas,” the USDA said.

Domestic soybean supplies totaled 435 million bushels on June 1, the lowest level at that point since 2004. Analysts had expected 441 million bushels.

Soybean futures were mixed after the report, with July soybean futures up 9.25 cents, or 0.6%, at $15.5775 a bushel at the Chicago Board of Trade.

Wheat futures declined in tandem with corn futures. Wheat prices often are affected by corn prices because both grains are used in animal feed.

CBOT July wheat futures recently were down 9.25 cents, or 1.4%, at $6.5425 a bushel, after sinking to a one-year low before the USDA’s reports.

The USDA also raised slightly its estimate of spring-wheat plantings to 12.3 million acres.

Wheat stockpiles fell 3% to 718 million bushels. Analysts had forecast 750 million bushels.

Write to Owen Fletcher at owen.fletcher and Jeffrey Sparshott at jeffrey.sparshott

A version of this article appeared June 28, 2013, on page B5 in the U.S. edition of The Wall Street Journal, with the headline: Crop Forecast Stunts Corn Prices.

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Corn Leads Grain Plunge as U.S. Acreage Tops Estimates – Bloomberg

Corn futures tumbled to a 32-month low, while soybeans and wheat fell to the cheapest in a year, after the government said U.S. farmers will plant more grain than forecast and the largest oilseed crop ever.

Planting of corn, the biggest domestic crop, jumped to 97.379 million acres, the most since 1936, the U.S. Department of Agriculture said today in a report. Analysts in a Bloomberg survey expected 95.431 million. Wheat acreage reached a four-year high of 56.53 million, and soybeans were sown on a record 77.728 million. Corn dropped for the seventh straight session, and wheat capped the longest slump since December 2009.

Corn Leads Grain Plunge as U.S. Acreage Tops Analysts Estimates

Corn is loaded into a grain hopper in Le Roy, Illinois. Photographer: Daniel Acker/Bloomberg

U.S. farmers, the world’s biggest growers of corn and soybeans, are forecast by the USDA to produce record harvests this year, while the United Nations predicts global wheat output will be the highest ever. That will cut costs for buyers including Archer-Daniels-Midland Co., the largest corn processor, and Tyson Foods Inc., while curbing food prices down 9.5 percent from a record in February 2011.

“Farmers planted more corn, soybeans and wheat than almost anyone expected after all the rain earlier this year,” Dale Durchholz, the senior analyst at AgriVisor LLC in Bloomington, Illinois, said in a telephone interview. “The U.S. crop potential is getting bigger, and that will keep the markets on the defensive and put farmers in a more aggressive selling mood.”

Corn futures for delivery in December tumbled 5.1 percent to close at $5.11 a bushel at 1:15 p.m. on the Chicago Board of Trade, the biggest decline for the price after the harvest since March 28. The price touched $5.06, the lowest for the most-active contract since Oct. 8, 2010.

Soybeans, Wheat

Soybean futures for November delivery fell 1.8 percent to $12.52 a bushel. Earlier, the oilseed touched $12.47, the lowest since June 4, 2012.

Wheat futures for September delivery slid 2.4 percent to $6.5775 a bushel. Earlier, the price touched $6.56, the lowest since June 19, 2012. The grain dropped for seven straight sessions.

Companies that use crops to make livestock feed, fuel and food will benefit from the slump in futures, said Brett Hundley, an analyst at Richmond, Virginia-based BB&T Capital Markets, a research firm that makes stock recommendations on agribusiness companies.

Lower Costs

“Much bigger numbers for corn acres are going to filter their way through the food-supply chain,” Hundley said in a telephone interview. “It will lower potential costs for protein producers and corn-sweetener producers.”

In New York, ADM (ADM) shares rose 0.6 percent to $33.91 after reaching $34.22, the highest since May 28. They have jumped 24 percent this year.

Tyson climbed 1.8 percent to $25.68. The stock has advanced 32 percent this year.

Increased corn sowing will boost stockpiles that fell to the lowest in 16 years. Inventories on June 1 totaled 2.76 billion bushels, down 12 percent from the prior year and the lowest since 1997, the USDA said today in a separate report. Analysts forecast reserves at 2.862 billion bushels. In 2012, the most-severe drought since the 1930s cut production.

July Premiums

The premiums for July corn and soybean futures above the most-active contracts after the harvest surged to records after the USDA confirmed shrinking inventories, Roy Huckabay, an executive vice president at the Linn Group in Chicago, said in a telephone interview.

Today, the premiums surged 31 percent to $1.68 for corn and 14 percent to $3.13 for soybeans.

The increase in acreage and forecasts for no excessive rain or extreme heat in the U.S. will boost crop prospects, Huckabay said. Drier weather and warm temperatures in the next 10 days will aid plant development from Minnesota to Illinois, where some fields got more than three times the normal amount of rain in the past month, Commodity Weather Group LLC in Bethesda, Maryland,, said in a report.

About 65 percent of the corn was rated in good or excellent condition on June 23, up from 56 percent a year earlier, and 65 percent of soybeans earned top ratings versus 53 percent, the USDA said in a report this week.

“The market spreads are trying to slow demand for last year’s supply, while factoring in a big crop this year,” Huckabay said. “Corn and soybean supplies will be tight before what should be record crops this year. Weather looks wet with little heat and that means good yields.”

To contact the reporters on this story: jwilson29; Tony C. Dreibus in Chicago at tdreibus

To contact the editor responsible for this story: Steve Stroth at sstroth

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