US Retail Gasoline Average Slips 0.2cts after 5 Weekly Gains -- The average price for all formulations of regular grade gasoline eased 0.2cts to $3.389 gallon for the week-ended Jan. 23, according to data released by the Energy Information Administration, which follows five consecutive weeks in which the average advanced. The national average for the week reviewed is 27.9cts above the comparable year-ago price point. EIA reported retail gasoline price mostly gained across the nation, with the exception of the Midwest region which registered a 5.5cts drop to $3.307 gallon.
US Retail Diesel Average Dips 0.6cts to $3.848 Gallon -- The national average for on-highway diesel fuel eased 0.6cts to $3.848 gallon for the week-ended Jan. 23, the Energy Information Administration reports. At the current level, the average is 41.8cts above the comparable week in 2011, EIA data showed. Regionally, retail on-highway diesel fuel prices were mostly lower across the board. The Midwest region registered a 1.0cts decline on the week to $3.736 gallon, which marks an increase of 34.4cts versus the corresponding 2011 price point.
Biodiesel Production Tops 1 Billion Gallons -- The U.S. biodiesel industry produced nearly 1.1 billion gallons of biodiesel in 2011, a new industry record, according to data released Friday by the Environmental Protection Agency. The previous record of 690 million gallons was set in 2008. The latest EPA numbers show that 160 million gallons of biomass-based diesel were produced in December -- a monthly output record. "We've been seeing a lot of stories about setbacks in the renewable energy sector recently, and I think our success in 2011 reflects the bigger picture reality, which is that strong energy policy is working to stimulate production of clean, American-made energy," said Anne Steckel, vice president of federal affairs for the National Biodiesel Board, an industry trade association.
Has The Mild Winter Jeopardized The Quality Of Your Stored Grain? -- When USDA reported December 1 grain stocks earlier in January, farm storage accounted for 6.18 bil. bu. of corn, 1.14 bil. bu. of soybeans, and 405 million bushels of wheat. Whether or not you agree with those numbers is one thing, but another issue is the quality of the grain stored on farms. Certainly, a significant amount has moved to the elevator for the purpose of fulfilling forward contracts for January delivery. But there will still be a significant volume of grain which has been subject to non-winter temperatures, and some bins may have “come to life” during some of the warmer spells of the past few weeks. Are you hesitant to look in your bins?
Keeping your stored grain safe is the same challenge a small town banker may have. The vault may only hold several hundred thousand dollars, but to a farm family that may be the entire years’ income and the last thing you want to happen is being forced to sell it at salvage value. Your crop insurance policy does not cover grain that might spoil in the bin. And the odd winter weather we have had puts in jeopardy some of the stored grain and creates challenges for farmers who need to keep the air flowing.
In the next several days your state climatologist will be issuing his or her report on January weather and how much warmer it may have been compared to other years back to 1895. That should be a reminder your grain bins may need more attention than usual. University of Nebraska ag engineer Tom Dorn points out a number of issues that you want to put on your checklist, if your stored grain is still a work in progress.
Dorn says a lot of grain went into the bin in good condition, because early maturity and harvest conditions produced dry grain. But the warm fall temperatures meant grain went into the bin too warm to maintain the quality of the grain; and it should have been cooled to about 40º F as outside temperatures fell. But the grain should not be cooled to the point of freezing.
If your grain is cool, but still higher moisture than you would like going into the spring, Dorn says wait for a warmer day with low humidity to turn on the fan for more aeration. But he says there may be some times when putting air into the grain will also put more moisture into it. Whether that happens depends on the temperature of the grain. He says, “When the air temperature is 50ºF and the relative humidity is 50%, the dew point temperature is 32º, and when the grain temperature is lower than the dew point temperature, air will condense moisture onto the grain until the air stream warms the grain mass above the dew point temperature.” He is concerned about the development of frost in the grain, which not only adds moisture but retards air movement through the grain.
If you have had blowing snow drop into the top of your bin, warmer temperatures will convert that to moisture in the grain and home to insects and mold, so beware of any snow that has made its way into the bin. When you check the bin, open the roof hatch, then turn on the fan and climb back up. Dorn says let the air hit you in the face. If the air is warmer than expected, more moist than expected, or condensation underneath the bin roof you have a problem.
Dorn says run the fans long enough to uniformly cool the grain and to do that use a probe with a grain thermometer. Probe down 3-4 feet, probe several feet in from the bin wall, and probe several spots in the center of the bin. If the temperature readings are more than 8º apart, run the fan until the temperatures are more uniform.
As the weather warms the temperature of the grain must be helped to warm up as well. Warm it in stages up to 40º, and if the moisture is too high for spring and summer storage, then do some additional drying on days of low humidity. Keep the corn within the typical range of day and nighttime temperatures.
EFFINGHAM EQUITY GRAIN COMMENTS 1-31-2012
WHERE WILL CME SPOT GRAIN PRICES BE ON DEC 31, 2012?
It is only a guess, but Reuters traditionally takes a poll of grain analysts at the beginning of each year, asking them where they think spot prices will be at the end of the year versus the prior year. The ranges were wide. Here are the average guesses of 12 analysts:
--Corn 5.47 on Dec 31, 2012 (range 4.00-8.12) vs 6.47 on Dec 31, 2011, vs 6.29 on Dec 31, 2010.
--Soybeans 11.47 (range 8.50-16.33) vs 11.99 on Dec 31, 2011, vs 13.94 on Dec 31, 2010.
--Wheat 6.09 (range 5.00-8.30) vs 6.53 on Dec 31, 2011, vs 7.94 on Dec 31, 2010.
Call us at Prime Ag with any questions or what your predictions for the markets are. 1-800-211-1757.
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Federally Inspected Slaughter -- the cattle run last week was 20,000 head fewer than the week prior but was 1 pound heavier on carcass weight -- cattle processors are finding it difficult to be profitable with the current cost of inventory and the price of wholesale beef -- the only real margin coming in the cattle packing industry currently is coming from the co-products such as hides -- pork processors are starting to find a similar situation as inventory cost are not falling as rapidly as wholesale pork products -- last weeks pork slaughter was 54,000 head fewer than the week before
Prior Week Slaughter (Head)
Average Carcass Weight
YTD Slaughter
YTD Slaughter
YTD Tonnage
Beef
608,000
781
2,443,000
-4.72%
-4.78%
Pork
2,167,000
209
8,670,000
0.18%
0.33%
USDA Cattle Inventory Report -- Friday’s Cattle report from USDA indicates that the number of cattle on U.S. farms and ranches on January 1 was, for most categories, smaller than one year ago AND smaller than was expected by analysts. Charts for four key items appear below. Some highlights are:
There were 90.769 million cattle and calves on U.S. farms as of January 1. That number is 2.1% lower than on year ago and 0.5% lower than the average of analysts’ pre-report expectations — a relationship that is mildly bullish for cattle prices this year and next.
The beef cow herd on January 1, 2012 is sharply lower than one year earlier. That is no surprise but the 3.1% decline is larger than was expected, since analyst’s average estimate was –2.6%. The decline of 3.1% is the largest since 1986 when the herd declined 4.7% — on the heels of a 5.5% decline in 1985. Those were the years of painful adjustments to declining beef demand.
This year’s decline is the sixth in a row and twelfth in the past fourteen years. Since that string began in 1996, the U.S. beef cow herd has declined by 15.4%. It should be noted, though, that commercial cattle slaughter has declined only 6.8% from 1996 to 2011 and commercial beef production has GROWN by 3.1%. The relatively smaller decline in slaughter is due to higher calving percentages, higher calf survival rates and faster growing cattle that enable higher output from a given sized herd. The smaller decline in beef output was driven by those factors plus a significant increase in slaughter weights, enabled by better genetics, nutrition and growth promotants.
The beef cow herd decline of 967,000 head was driven almost entirely by the reduction of the nation’s two largest state beef cow herds in Texas and Oklahoma. The Texas herd declined by 660,000 head (13%) to 4.365 million as of January 1. Oklahoma’s herd fell by 288,000 head (14%) during the year. Nebraska was the benefactor of some of those Texas and Oklahoma reductions as cows were moved northward to relatively ample grass supplies. Nebraska’s beef cow herd was 6% larger on Jan 1.
One surprising number relatively to the pre-report survey data was that of heifers being held as beef replacements. That number at 5.212 million head was 1.4% HIGHER than last year where ALL analysts expected the number to be lower. We were a bit surprised by those expectations in the first place as we have heard since last summer that some significant heifer retention has commenced in northern and southeastern states. Nebraska’s beef heifer numbers are up 55,000 head (18%) from January 1, 2011.
The 2011 calf crop is now estimated at 35.313 million head, 1.8% smaller than last year and the smallest crop dating back to 1951, the oldest data we could get our hands on. The crop is also 0.8% smaller than was expected by analysts — a bullish factor for 2013.
The supply of feeder cattle outside of feedlots on Jan 1, as computed by the Livestock Marketing Information Center, was 3.9% lower at 25.845 million head. There is a reason that feeder cattle prices are record high!
Finally, the number of cattle on feed in ALL feedlots was up 0.8% on January 1. That compares to +3% for lots that hold 1000 head or more. Small lots have reduced their inventories from 2.499 mil. head to 2.270 mil. head (9.2%) as feeder cattle prices have soared.
Government News
Crop Insurance Price Discovery Period Begins – Local corn and soybean producers wanting to stay in tune with the price discovery levels that will affect coverage levels for Crop Insurance can monitor daily prices at the following website during the month of February while the spring price is determined. http://www.rma.usda.gov/tools/pricedisco very.html
USDA: New long-term ag projections -- The U.S. Department of Agriculture will release new 10-year agricultural projections Feb. 13 at 12:00 noon EST. The USDA Agricultural Projections to 2021 report will be released on the Office of the Chief Economist Web site at http://www.usda.gov/oce/. USDA publishes the projections each year in February. The long-term projections are developed by interagency committees in USDA, with the Economic Research Service (ERS) having the lead role in the preparation of the report. The new projections cover crop and livestock commodities, agricultural trade and aggregate indicators, such as farm income and food prices through 2021. The projections do not represent a USDA forecast, but a conditional, long-run scenario based on specific assumptions about farm policy, weather, the economy and international developments. Provisions of the 2008 Farm Act and subsequent legislation are incorporated into the projections and are assumed to remain in effect through 2021. Normal weather also is assumed throughout the projection period. Background on USDA's long-term projections and past issues of the report are available on the ERS web site at www.ers.usda.gov/briefing/projections.
Biodiesel Production Tops 1 Billion Gallons -- The U.S. biodiesel industry produced nearly 1.1 billion gallons of biodiesel in 2011, a new industry record, according to data released Friday by the Environmental Protection Agency. The previous record of 690 million gallons was set in 2008. The latest EPA numbers show that 160 million gallons of biomass-based diesel were produced in December -- a monthly output record. "We've been seeing a lot of stories about setbacks in the renewable energy sector recently, and I think our success in 2011 reflects the bigger picture reality, which is that strong energy policy is working to stimulate production of clean, American-made energy," said Anne Steckel, vice president of federal affairs for the National Biodiesel Board, an industry trade association.
Has The Mild Winter Jeopardized The Quality Of Your Stored Grain? -- When USDA reported December 1 grain stocks earlier in January, farm storage accounted for 6.18 bil. bu. of corn, 1.14 bil. bu. of soybeans, and 405 million bushels of wheat. Whether or not you agree with those numbers is one thing, but another issue is the quality of the grain stored on farms. Certainly, a significant amount has moved to the elevator for the purpose of fulfilling forward contracts for January delivery. But there will still be a significant volume of grain which has been subject to non-winter temperatures, and some bins may have “come to life” during some of the warmer spells of the past few weeks. Are you hesitant to look in your bins?
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USDA Cattle Inventory Report -- Friday’s Cattle report from USDA indicates that the number of cattle on U.S. farms and ranches on January 1 was, for most categories, smaller than one year ago AND smaller than was expected by analysts. Charts for four key items appear below. Some highlights are:
USDA: New long-term ag projections -- The U.S. Department of Agriculture will release new 10-year agricultural projections Feb. 13 at 12:00 noon EST. The USDA Agricultural Projections to 2021 report will be released on the Office of the Chief Economist Web site at 
