Agribusiness Report for Thursday, Sept. 4, 2014
CEDAR RAPIDS, Iowa - This year USDA, and the commodity markets, anticipate a monster crop for both corn and soybeans. Once this year’s harvest is out of the field, will there be delays in getting it to export terminals?
If it goes by rail, Mark Davis with Union Pacific says delays are unlikely. He says the entire Union Pacific fleet has increased by ten percent, with 15 hundred new covered hopper cars, used to transport grain, and two hundred more locomotives; some of which Davis says are already diverted for use during harvest.
Between 2007 and 2012, Union Pacific invested 18 billion dollars into its rail network. This year alone, Davis estimates his company has invested about four billion dollars into its infrastructure.
In Iowa alone, we’ve invested $327 million over the last four years from 2009 to 2013, so far this year, we’ve invested $24.3 million in the first six months. That’s private money, that’s Union Pacific money and not federal money.
However, Davis does point out that if commodity prices jump and producers try to move this year’s crop along with any of the old crop they might be hanging on to, the supply of available cars would undoubtedly tighten.
Here’s an offbeat story: last month USDA’s animal and plant health inspection service - APHIS - seized a fist-sized Giant African Snail and three hundred of its offspring from a New York resident.
APHIS traced the snails back to Great Britain through a seller in Georgia, and seized about a twelve hundred of the critters, which coincidentally is the number of offspring one snail can produce in a year.
The snails, also called G-A-S, are classified as an invasive species, which eat over 500 types of plants - including row crops - and can carry parasitic roundworms which cause meningitis in humans.
It is illegal to posses the snails in the U.S. but some people keep the snails as pets or eat them as a delicacy. They were first discovered in southern Florida in the 1960s and were eradicated after one million dollars and a decade’s worth of effort. In 2011, it was reintroduced, and according to APHIS efforts to get rid of it are still underway.
Yesterday new crop December corn broke out of its six-week trading range to make new contract lows at three-51 and a quarter. President of Roach Ag Marketing Brian Roach says that’s probably due to private soybean yield estimates from F. C. Stone out on Tuesday.
I think what really started to draw the corn futures prices lower is the bean market. Which, they put out a 47.1 bushel bean estimate for this year and I... gotta believe that’s closer to accurate than the number that we were using based on the weather we’ve had this year the late rains, etc. We’re looking at a burdensome situation on beans. And I think the beans are certainly pulling the corn down with it.
You know, the risk in the cattle market remains mostly external. Packers this week you know will be purchasing for a full production week and that tends to tilt the cash markets to a trend steady to higher this week.
Well hogs have gone through a cycle, an adjustment, it’s real tough on the hogs because we’ve been working with inaccurate inventories. And I think that we’ll probably trade up to some good price levels for example if you look at December hogs they go back to trading 105 I don’t thing so. Certainly if we got above the 95 level on up to 100, you know, i’d be looking to contract some if I was a hog producer in that camp.