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Monday August 26, 2014
Deal of the Day!

Max 19 fiber Pollinators, 2 week takeout at $ 135.00 del. MOT !! down $2 more

Wednesday August 13, 2014
USDA raising concerns that CP not alleviating shipping backlog fast enough... USDA is concerned Canadian Pacific (CP) railroad is not alleviating its shipping backlog fast enough to handle this fall’s grain harvest in the upper U.S. Midwest. CP would need to move about 4,725 cars per week to clear its current backlog by Oct. 3, but it only moved an average of 1,969 a week in July, USDA’s undersecretary for marketing and regulatory programs, Edward Avalos, said in a letter to the Surface Transportation Board (STB). He wants STB to have CP explain how it will clear the grain backlog by October. Avalos also wants the STB to consider what remedies it has available should the railroad be unable to meet its obligations. Wheat is already being stored on the ground in South Dakota, and with a record corn crop ahead, at least six states are expected to exceed their storage capacity -- South Dakota, Nebraska, Minnesota, Iowa, Illinois and Indiana. Stored grain on the ground raises the risk of spoilage, Avalos said. “The projected size of the upcoming harvest creates a high potential for loss in the affected states,” he wrote. Meanwhile, BNSF Railway's Matt Rose, executive chairman, was in North Dakota last week and told shippers that the number of past-due grain cars has dropped to less than 1,000 a week, down from 4,000 in mid-July.
Tuesday August 12, 2014
Yields are WAY up and prices will have to fall to create enough demand to eat up the extra seed.
U.S. cottonseed production will be 1.574 million tons more than 2013's 4.203 million tons.

Click here to see 2014 production chart in PDF
Friday August 8, 2014
CDFA Releases Milk Pricing Reform Legislation
This week the department released draft legislation that would substantially reform the milk pooling system. The concepts in the legislation evolved from their dairy pricing work group. The bill is being characterized as a compromise between the dairy farmers and cooperatives and the privately held creameries. Specifically the legislation would:
  • Index the price of milk to the federal price. The current proposal uses Alternative Milk Marketing Agreements and would be set by administrative action by the Secretary. According to Department economists, current conditions would index the price at 50 cents below federal price, which is a substantial increase from the past several years.
  • The processor community will get the ability to forward contracts for milk outside the regulated system. CDFA will collect contracting information and publish it - in aggregate form - so that the price signals from these contracts will be available for all industry participants to see.
  • Transitions both the pricing and contracting provisions over two years by allowing producers and processors to enter into AMMAs for Class 4a and 4b milk at a rate of 25% the first year, 50% the second year and up to 100% in year three.
The intention is to place the legislation in a bill and move it this year prior to the August 31 deadline. The association is working closely with our dairy farming customers to evaluate the proposal, suggest any amendments and take a position.
Monday August 5, 2014
SD elevator full, shuts doors as a result of poor rail service
The Midwest Cooperatives elevator in Pierre, S.D., has closed its doors because it has no more room for storage. Officials say it's a result of the poor rail service.

PIERRE, S.D. — Horrible. Embarrassing.

That’s how Jeremy Frost, grain merchandising manager for Midwest Cooperatives elevator based in Pierre, S.D., describes wheat marketing, one of the early rail performance casualties in the 2014 harvest campaign.

Midwest Cooperatives has locations at Pierre, Onida, Blunt, Philip, Kadoka, Draper and Highmore, all in South Dakota, and is associated with CHS Inc. The elevator is served largely by the Rapid City, Pierre & Eastern Railroad based at Rapid City, S.D., which was sold to Genesee & Wyoming Inc. on May 31, by Canadian Pacific Railroad.

Frost says all of his elevators are full. (More at AGWEEK)
Saturday August 2, 2014
When China Spurns GMO Corn Imports, American Farmers Lose Billions
by Dan Charles July 31, 2014 5:45 PM ET

For a while there, China was the American farmer's best friend. The world's most populous nation had so many pigs and chickens to feed, it became one of the of U.S. corn and soybeans almost overnight.
China also developed a big appetite for another corn-derived animal feed called "dried distillers grains with solubles," or , a byproduct of ethanol production. China's appetites for the stuff drove up global grain prices and filled Midwestern pockets with cash.
This year, though, the lovely relationship has gone sour, all because of biotechnology.
A couple of years ago, American farmers began (link to full article at NPR)
Thursday July 31, 2014
BRING US YOUR WILD AND OUT OF THE MONEY BID IDEAS TODAY FOR CORN GLUTEN, CORN GERM & DDG. I HAVE SUPPLIERS WHO WANT TO SEE THEM AND GET SOME THINGS DONE. YOU NEVER KNOW UNTIL YOU TRY . GIVE US A TRY. THANKS, WES
Current US Drought Monitor - New map released each Thursday
Wednesday July 23, 2014
July 23, 2014 | Chemical News & Intelligence

Over Half of US Corn Pollinated; Soybean Blooming Increasing
Crop conditions unchanged in the past seven days

In terms of crop conditions for corn, the agency left its categories unchanged in the past seven days highlighting the stability that improved weather conditions, namely the decrease in precipitation, have had on corn growth.

The amount of corn entering the pollination phase has increased by 22 points to 56% at this time, which is ahead of the 39% seen in 2013 and just a tad over the five-year average of 55%.

Crops might find the upcoming week less pleasant as the anticipated weather forecast is calling for hotter and drier conditions to prevail. Although this is beneficial to growers wanting fields to dry out, this weather will increase stress on growth and pollination activity.  Link to read more of this item at Feed and Grain
Friday June 27, 2014 
Time to think about Canola

We have, I think, bounced off the bottom of the Summer Canola Market. In talking to shippers all
over the state as well as in Canada, the consensus is that they are cutting back on trains to the West.
The basis numbers that can be bought cannot be sold.
Last year we dried up in September and had a very hard time with skyrocketing prices. Well, we will see that a month earlier in August and it will last until new crop. Rising old crop prices will bleed into new crop numbers. Every crusher in Canada can get more $$$ from Vietnam than California and we need to come to terms with that.
While Corn may have some more downside, by-products do not. DDG has gone up $10 this week on all the Old Crop months, New Crop numbers are up even more. I do not relish being a prophet of doom but I seriously believe we have turned a corner and it is time to get serious about covering the balance of Old Crop.

Thanks, WES
1-800-406-5269
 
Wednesday June 4, 2014 
Today on Feed & Grain:
Oklahoma Wheat Producers Expect Small Crop This Year
Still trying to salvage a crop, despite late spring freeze and ongoing drought
Monday June 2, 2014 
Finally ! We have a Oct/Nov/Dec. price of $220 fob/$226 del for Oct/Nov/Dec. rolled corn.

The current free fall of corn futures will last for a little while yet but when adverse weather arrives it will disappear in a heartbeat. The time to tie up the cheap corn by-products may well be NOW !

Thanks WES  
Friday April 11, 2014 
The Sober Reality Behind Dairies’ Return to Profitability
Apr 10, 2014

As dairies emerge from a painful recession, a veteran attorney urges attention to the critical fiscal steps still needed to move forward.

By Riley Walter, attorney

Since last writing for Dairy Today, milk prices are up and I am hearing sighs of relief across the dairy industry.

While I don’t want to deprive anyone of a feeling of relief, this does cause me to make two comments.

First, I am hearing the sighs of relief, but I am not hearing how many dairymen are going to address the huge mound of built-up unsecured debt they owe. While the milk price is up, and while dairymen are beginning to sprinkle money around to their creditors, that mound of debt is huge in many instances and is going to have to be addressed in one form or another. I note that some of the creditors who are not being "sprinkled" are beginning to initiate the long-anticipated collection suits, now that they can see that there could be some money at the end of the rainbow.

The second point relates to refinancing. We are all aware that some of the main-line commercial banks would just as soon not have dairies in their lending portfolio. Some even take more aggressive action to force them out of the bank before maturity. Others appear to be biding their time so that when loan renewal comes up, they may or may not be willing to lend.

This leads me to suggest that dairymen need to be looking ahead now to see how and when, if at all, they will be able to refinance.

In connection with this, here are some thoughts:

·  Dairymen will want to pay attention to which banks are, and are not, making dairy loans. Some long-experienced dairy bankers have been moving around to other banks, and this leads me to believe that there may be banks in the mood to make dairy loans before very long. 

·   Dairymen need to consider rebuilding relationships. Many dairymen have had long relationships with experienced dairy lender personnel, and now would be a good time to just check in to find out what the attitudes of the banks are and what banks are looking for in new dairy loans

·  It goes without saying that dairymen need to monitor values. If you are going to refinance, you may want to do so when values are up and trending up, rather than the other way around. 

·  Dairymen will want to educate themselves as to the rules that apply to lenders. This is not 2007, where someone with a ball cap could get a loan. Regulations are much more stringent now. You need to know about those rules as you start the process of looking for a new lender. A simple example is the rules about lending to a dairy that may be within a floodplain and whether this would require extensive engineering work before a loan would even be considered. 

· Last, and certainly not least, dairymen need to get their houses in order. They need to make sure that all of their entity documents are current and up to date. They need to be sure that they have documented all easements. They need to be sure they know exactly what collateral they have to pledge. Now is the time to get the books and records in tip-top shape. Pull together copies of all of the documents that you will need to support your loan request.

There is life after the crash, but lessons have been learned – painfully.

Riley Walter is an attorney and founder of the Central Valley-based Walter & Wilhelm Law Group, a law firm specializing in agribusiness, reorganization and bankruptcy. Contact him at 559-435-9800 or RileyWalter@W2LG.com.
April 2014
NATIONAL DAIRY MARKET NEWS AT A GLANCE - For the week of April 21 -  April 25, 2014
 
May 2014 Update - CIH Dairy Margin Watch 
Margin Watch is an executive summary of the projected forward profit margins (not markets) for the dairy industry. Click here to see how margins have changed and to read about the strategies that our clients are using to protect profitability. We look forward to your feedback or inquiries. To see how our service can help you manage your margins, call us at 1-312-596-7755.

*** VIDEO INTERVIEWS *** CIH sits down with Dairy Consulting Clients, Paul and Corinne Vissers.
Watch the videos here.

Sincerely,
Commodity & Ingredient Hedging, LLC

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