Weekly Comments - Amazon S3 · Weekly Comments [email protected] Office 1-877-365-3744 Friday March 8, 2013 (an equal opportunity provider) The information contained herein was obtained

Weekly [email protected]

Office 1-877-365-3744www.mnwestag.com

Friday March 8, 2013

(an equal opportunity provider) The information contained herein was obtained from sources believed to be reliable, but can not beguaranteed. All examples given are strictly hypothetical and neither the information, nor any opinion expressed, constitutes a solicitation tomarket commodities or buy or sell futures or options on futures. Commodity marketing and trading is risky. Trading and/or marketingdecisions and any trading and/or marketing gains or losses are the responsibility of the commodity owner, producer, and/or account holder.Minnesota West Ag Services LLC and principals and employees assume no liability for any use of any information contained herein.Reproduction without authorization is forbidden.

Reminder: I will be traveling to ChinaMarch 19 – 28 with the MN SoybeanResearch and Promotion Council onthe “See For Yourself” trade mission.The visits include end users of soybased products near Beijing, Yantai,Shenzhen, and Hong Kong.More information will be provided thisnext week.

Position Management: The table shows how the Sample Farm is positioned at this time. Individual recommendations may vary.2012 Crop 2013 Crop

Corn 70% sold 25% - 30% sold HTA

Soybeans 90% Sold 40% sold HTA40% covered with put options

Strategy & Price Targets:

2012 Corn currently 70% Sold. Prior comments indicated that we recommended that you consider adding another 20% sale if March futuresreach the $7.60 area as downside risk may not warrant risking the upside potential. This would have you 90% sold on the 2012 Corn Crop.Recent high was March at $7.44 ½ on Thursday Jan 31st – Revised Recommendation: consider having open orders in place for 20% to get

to 90% sold at May 13 futures price of $7.25 with a +.10 basis many locations will be near $7.35 cash .

2012 Soybean previously 70% sold - now 90% Sold. Prior comments indicated that should a rally occur we may wish to make at leastanother 20% sale near $14.75 March Futures, and we may wish to be sold out near $15.45 futures. The $14.75 objective was met WednesdayJan 30th with a high at $14.81 ¾ and would have you at least 70% sold. Recent high was $15.16 ½ on Friday Feb 22nd. Consider havingopen orders in place to add to sales if May 13 futures reach $15.40 for ALL the remaining bushels.

2013 Corn currently 25-30% sold. Prior comments indicated that we recommended that you consider adding to sales to get to 40% soldbetween $6.20 and $6.30 Dec13 futures if a rally provides the opportunity. Recent high was $5.94 ¾ on Friday Feb 1st. Consider havingopen orders in place near $6.20 Dec 13 futures, perhaps at the $6.18 price, Use Futures Fixed (HTA) if basis is wider than -.40 or use Mar 14Futures Fixed if a Jan14 -Mar14 delivery is desired. Leave basis open unless you can get -.25 or better. In addition, we would like to cover40% with Dec13 put options if we can get them bought to provide a $5.50 Futures floor for $0.50 in premium costs. Consider having openorders in place to buy Dec 13 corn $6.00 puts at $0.50 in premium costs. The most recent low premium was $.55 on Monday Feb 4th and asof today, Fri Mar 8th the options are quoted at $.81

2013 Soybeans now 40% sold and 40% protected with put options. Prior comments indicated that should Nov13 soybeans reach $13.30 to$13.40 we may wish to push up sales to get to 40% sold. The $13.30 objective was met Wednesday Jan 30th with the high at $13.37 andwould take you to 40% sold. Consider getting sales for this fall to 40% sold with Nov 13 or for Jan 14 if deliveries in next calendar year aredesired, use Futures Fixed (HTA) if basis is wider than -.45 for fall or -.30 for Jan14. In addition we recommended that we would like tocover 40% with Nov13 put options if we can get them bought to provide a $12.50 Futures floor for $0.90 in premium costs. The Nov 13soybean $ 13.40 puts options traded at $0.89 7/8 Tuesday Feb 5th filling all the open orders that were in place that afternoon. As of today, FriMar 8th the options are quoted at $1.24

Hedge: a means of protection against something, especially a means of guarding against financial lossSpeculate: to form a conjecture on the basis of incomplete facts or information, to engage in financial transactions that have an element ofrisk.

Next Major USDA Reports: USDA Prospective Plantings March 28, 2013 USDA Grain Stocks March 28, 2013USDA Quarterly Hogs & Pigs March 28, 2013

Friday CBOT Futures Closes






Basis: Nearby Corn basis continues to narrow with some country elevators and end users better than +.05 to +.15 under the May Futures.Other country elevators with corn basis wider at -.07 to -.15.

Nearby Soybean basis continues to remain firm as processors are +.20 with the May Futures. Some elevators with Soybean basis steady at-.10 to -.20 the March futures.

New CBOT HoursThe Chicago Mercantile Exchange has announced it will be changing the hours of business on the Chicago Board of Trade beginning April8th, pending CFTC approval. The CBOT will now be open from 7:00 PM until 7:45 AM Sunday through Friday. The CBOT will then halttrade from 7:45 AM until 8:30 AM, and then continue through 1:15 PM. These changes are based off feedback from CBOT customers,mainly surrounding how trade is open during government reports. All times are Central time.

RMA Established Crop Insurance Base Prices Corn $5.65 Soybeans $12.87 Wheat $8.44

Market Talk Wheat and corn values approach the same price level, and wheat is now cheaper to feed than corn.A number of climatologists are speaking of the difficulty for much of Iowa, Minnesota, South Dakota, and parts of Nebraska to achieve

trend line or even near normal corn yields because of last year’s severe drought, and the amount of moisture needed to replenish subsoilmoisture. A look at SW MN Research station data on page 13 shows that subsoil moisture is near zero when historical levels of soil moistureis near 4” to 6” .

Reports show that small position corn traders added about 37,000 contracts of May corn at an average price of about $7.65 and they areabout $.60 underwater. If they decide to liquidate their positions, the market would be under additional pressure.

September corn on the Chinese Dalian Exchange was trading at $9.97 about $2.50 above the CBOT and in line with the freight differential.Traders are looking for a reason to be supportive of corn values and are finding it difficult to be supportive with increased corn imports and

USDA lowering exports along with potential feed usage pressure from wheat.

Ethanol RINs are the basis of the accounting system created by the Environmental Protection Agency (EPA) for use in enforcing the fuelmandates outlined under the RFS2. A RIN is a 38-digit number assigned to each gallon or batch of renewable fuel produced or imported intothe U.S. Each RIN travels through the supply chain with the biofuel it is associated with until it is separated, at which point the RIN can beapplied towards the mandate of an obligated party (fuel blender) or traded among other obligated parties or speculative traders, potentiallyfor application towards the mandate at a future time. Thus, the RINs system allows obligated parties to meet their individual mandates byapplying RINs representing biofuels which they have physically purchased and blended, or those which were purchased from another partythrough RIN trading.

The price of RINs exploded beginning in early 2013. The price moved from about $0.05 per gallon at the end of December to about $0.26in early February and is now over $0.70 per gallon. Research indicates that the underlying reason for the increased value of D6 RINs lies inthe impending collision of the blend wall for E10 and the rising renewable (ethanol) mandate under the RFS. This situation results in theprospect for a sharp draw down in RIN stocks in 2013 and 2014 as physical blending of ethanol, due to the blend wall, falls further andfurther behind the mandate levels.

The estimated inventory of RIN credits as of Jan 1, 2013 was thought to be near 2.6 billion gallons. With physical ethanol blendingexpected to fall below the mandated level this year, RIN stocks could decline to about 1.2 billion gallons by year-end. With slow growth inthe ethanol blend wall and a larger blending mandate in 2014, the stock of RIN credits could be depleted by the end of 2014. The prospect ofnot being able to meet ethanol blending mandates with physical blending and prospects for a rapid decline in the stock or RIN credits in thevery near future has substantially increased the value of the RINs.

Once the excess RINs are used, then the only way to meet the mandate will be by actual physical blending of ethanol, this bodes well forfuture profitability of Ethanol plants. In the meantime elevated RIN values should also be supportive of ethanol prices.






USDA WASDE Report

Trade is aware that old crop carryout is going to be tight on both corn and soybeans. At the same time, just normal new cropyields will be enough to cause a considerable build in ending stocks. The hard part for the market now is to ration old cropinventory while promoting new crop usage, which can be a difficult task.

The U.S.D.A. is being criticized for the yield estimates it released in its February Outlook Forum. The U.S.D.A. is projectingyields of 163 bushels per acre on corn and 44.4 bushels per acre on soybeans for the 2013-14 crops. Many are quick to claimthese yields will be hard to achieve given current drought conditions in the Corn Belt. While this may be true, and yieldreductions may take place, the bottom line is that even with reductions from government yield predictions, the United Statescould still see a rebound in grain reserves.

The U.S.D.A. left the US corn carryout unchanged at 632million bushels, the trade had been expecting a 17 millionbushel increase to stocks. Corn exports were decreased by75 million bushels and off-set with increase of 100 millionin feed demand and also 25 million increase in imports.Ethanol use was left unchanged at 4.5 billion bu.

The U.S.D.A. decreased the world corn number by .5million metric tons, mainly from a slightly smallerArgentine crop.

U.S.D.A. left the US soybean ending stocks estimateunchanged at 125 million bu. the trade had been expectinga decrease of 5 million bushels. Soybean exports were leftunchanged, as the U.S.D.A. believes sales will slow as themarketing year progresses.

Global soybean carryout was changed slightly to 60.21million metric tons up from 60.12 mmt. U.S.D.A. keptBrazil’s soybean crop at 83.5 million tons, but did cutArgentina’s 1.5 million metric tons.

U.S.D.A. increased the US domestic wheat carry out by25 million bushels to to a comfortable 716 million bu.reducing exports by the 25 million bu.

Global wheat carry out was increased by 1.5 mmt upto178.23 mmt which was above the trade estimate of 176.54by 1.68 mmt. EU-27 wheat production was increased .52mmt while India production was also increased .98 mmt.






Commentary below from United States Department of Agriculture Foreign Agricultural Service Circular Series WAP 2-13

USDA forecasts Brazil corn production for 2012/13 at 72.5 million tons, up 1.5 million or 2 percent from last month, but down 0.5 milliontons or less than 1 percent from last year’s record production. Area is estimated at a record 15.5 million hectares, no change from last month,but up 300 thousand or 2 percent from last year. Yield is forecast at 4.68 tons per hectare, up 12 percent compared to the 5-year average.Yield prospects for Brazil’s first season corn have improved due to good grain-fill conditions in the key states of Paraná and Goiás.Conditions are mixed in Rio Grande do Sul. Weather in late February will be a key determinant of yield potential for that state. Brazil has alarger second-season, or safrinha crop, which accounts for more than 54 percent of national production. The safrinha crop is planted inJanuary after the early-season soybean harvest. In late January 2013 analysts from the Foreign Agricultural Service traveled through MatoGrosso’s main safrinha producing state. Rain in Mato Grosso is causing some delays in harvesting of the early soybean varieties but farmersare able to harvest the soybeans and plant the safrinha corn. Corn planting can extend to the beginning of March in Mato Grosso but farmersare anxious to plant right now because the earlier planted corn has higher yield potential. The safrinha yield potential is determined by thelength of the rainy season. Last year the rainy season in Mato Grosso extended through June, and record yields for safrinha corn wereachieved. The rainy season typically ends in mid to late April.

USDA forecasts Argentine corn production for 2012/13 at 27.0 million metric tons, 4 percent below last month and 29 percent above the21.0 million produced in 2011/12. Harvested area is estimated at 3.5 million hectares, unchanged from last month but down 3 percent fromlast year’s drought-affected national area. Yield is estimated at 7.71 tons per hectare, 4 percent lower than last month but 32 percent higherthan last year. Crop condition as well as crop development vary across regions and from field to field, making it difficult to infer yieldresponse to the changing weather. Some of the Argentine corn now at grain-fill stage has base leaves turning yellow due to both moisture-deficit and to corn mite infestation, resulting in potential yield loss. Farmers have been battling armyworms and stem borers as well as blightand smut in areas that earlier had excess moisture but now have low surface moisture. Additional rainfall is needed across much of the nationto remove current soil moisture deficits of 40 up to 80 millimeters. Harvest has begun in northern and central Argentina, just as late seedingis finishing in the south.

USDA forecasts Brazil soybean production for 2012/13 at 83.5 million tons, up 1.0 million or 1 percent from last month and up 17.0million or 26 percent from last year’s drought-reduced crop. Area is estimated at a record 27.5 million hectares, unchanged from last monthand up 2.5 million hectares or 10 percent from last year. Yield is forecast at 3.04 tons per hectare, compared to 2.66 tons last year and the 5-year average of 2.85 tons. Yield prospects for Brazil soybeans have improved due to good early-season conditions in the key states of MatoGrosso, Parana and Bahia. In late January 2013 analysts from the Foreign Agricultural Service traveled through Brazil’s main soybeanproducing state, Mato Grosso, and a key swing state, Bahia. Soybean crop conditions in both states were observed to be very good.Harvesting of the early soybean varieties has started in Mato Grosso, and soybean yields are reported by contacts in the region to be as goodas last year. In Bahia contacts are expecting soybean yields to be significantly better compared to the drought induced lower yields of lastyear. Rains during the harvest of the early season varieties in Mato Grosso are causing some delays and may affect the quality of the earlysoybeans, but the rains are boosting yield potential for the medium and long-cycle soybeans. The main soybean harvest in Mato Grosso willcommence in late February. Brazilian farmers enthusiastically reacted to high soybean prices this year and increased area 10 percent to arecord 27.5 million hectares. Brazil is the world’s largest producer of soybeans, surpassing the United States this year when the United Statessuffered its worst drought in 50 years.

USDA forecasts Argentine soybean production for the 2012/13 season at 53.0 million metric tons 2 percent less than last month and 32percent more than last year. Area is estimated at 19.5 million hectares unchanged from last month and 11 percent more than last year. Yieldis forecast to be 2.72 tons per hectare, 2 percent lower than last month and 19 percent higher than last year. The seeding of the crop iscomplete, even in the northern region that earlier was too dry to seed. Most of the early-planted crop is in pod-set, while the second crop andlate-planted beans are largely in the moisture sensitive reproductive stage. Farmers are scouting fields for caterpillars to determine ifthreshold levels warrant insecticide spraying at this time. A lack of moisture in some areas and the limited and widely dispersed rains, seenwithin the last 15 days have caused concern for the crop.











Some analyst thinks that nearly 100 million acres of corn could get planted in 2013. Alt 1 look forward uses 96.56 million acres and a yieldof 163.6 (trend line yield is 164.0) with a demand of 13.010 billion and projected carry out grows to 2.177 Billion bushels.

Some analysts think that about 78.0 million acres of soybeans could get planted in 2013. Alt 1 looks forward uses 77.5 million acres and arecord yield of 44.5 plus strong demand of 3.295 billion and carry over grows to 250 million bushels.






May 13 Corn Daily December 2013 Corn Daily

May 13 Soybean Daily November 2013 Soybean Daily

Weekly Corn Weekly Soybean






US Corn Exports 2012-13 Net sales reductions of 49,800 MT for the 2012/2013 marketing year were down noticeably from the previousweek and from the prior 4-week average. Increases reported for China (57,500 MT, including 60,000 MT switched from unknowndestinations and decreases of 5,500 MT), Jamaica (20,100 MT), Mexico (8,800 MT), Saudi Arabia (6,200 MT), and Honduras (5,400 MT),were more than offset by decreases for Colombia (72,500 MT), unknown destinations (64,600 MT), the Dominican Republic (11,200 MT),and Taiwan (5,100 MT). Net sales of 206,400 MT for the 2013/2014 marketing year were for unknown destinations (136,200 MT), Mexico(60,000 MT), and China (10,200 MT). Exports of 367,200 MT were up 24 percent from the previous week and 27 percent from the prior 4-week average. The primary destinations were Mexico (88,700 MT), Japan (88,000 MT), Saudi Arabia (70,000 MT), China (54,500 MT),and Taiwan (34,100 MT).

Weekly Accumulated

US Soybean Exports 2012-13 Net sales of 392,000 MT for the 2012/2013 marketing year were down 43 percent from the previous week, but up 23percent from the prior 4-week average. Increases reported for the Netherlands (130,100 MT, including 128,000 MT switched from unknown destinations anddecreases of 3,600 MT), Mexico (114,900 MT), China (91,900 MT), Indonesia (37,300 MT), Vietnam (20,400 MT), and unknown destinations (17,100 MT),were partially offset by decreases for Panama (20,000 MT), Colombia (8,600 MT), Egypt (5,900 MT), and Canada (4,500 MT). Net sales of 990,600 MT fordelivery in the 2013/2014 marketing year were primarily for China (934,000 MT) and unknown destinations (55,000 MT). Exports of 1,094,900 MT were up33 percent from the previous week and 3 percent from the prior 4-week average. The primary destinations were China (666,600 MT), the Netherlands(130,100 MT), Mexico (101,000 MT), Egypt (54,100 MT), Taiwan (41,000 MT), Japan (37,500 MT), and South Korea (26,400 MT). Optional Origin Sales:For MY 2013/2014, outstanding optional origin sales total 130,000 MT, all China.

Weekly Accumulated

US Wheat Exports 2012-13 Net sales of 618,100 MT for the 2012/2013 marketing year were up 66 percent from the previous week and23 percent from the prior 4-week average. Increases were reported for unknown destinations (128,400 MT), Egypt (116,500 MT, including115,000 MT switched from unknown destinations and decreases of 4,500 MT), Nigeria (84,400 MT, including 38,000 MT switched fromunknown destinations), Japan (74,200 MT), China (60,400 MT), and Israel (42,400 MT). Decreases were reported for the Philippines(22,900 MT) and Jamaica (5,500 MT). Net sales of 210,000 MT for the 2013/2014 marketing year were reported primarily for unknowndestinations (110,000 MT), the Philippines (70,000 MT), Peru (12,000 MT), and Colombia (10,700 MT). Exports of 766,400 MT were up31 percent from the previous week and 44 percent from the prior 4-week average. The primary destinations were Egypt (193,000 MT),Nigeria (81,400 MT), South Korea (78,400 MT), China (61,500 MT), Israel (55,000 MT), Peru (53,100 MT), and Mexico (48,700 MT).

Weekly Accumulated






Bi-Weekly Corn Seasonal Price Charts:






Bi-Weekly Soybean Seasonal Price Charts:






Seasonal Charts

Outside Markets:

International Weather & Crop provided by Weekly Weather and Crop Bulletin, NOAA/USDAEUROPE: Cold, generally dry weather in western Europe contrasted with mild, rainy conditions farther east.FSU-WESTERN: Unseasonably mild weather kept southern growing areas free of snow cover and encouraged early spring grain planting and winter wheatgreen up.MIDDLE EAST: Mild, wet weather continued to benefit winter wheat and barley.NORTHWEST AFRICA: Showers maintained abundant soil moisture for winter grains.SOUTHEAST ASIA: Drier conditions in western Java, Indonesia, benefited rice harvesting.AUSTRALIA: Soaking rains disrupted fieldwork and slowed maturation of the earliest planted summer crops.SOUTH AFRICA: Scattered showers brought some relief from dryness to major eastern production areas.

ARGENTINA:Widespread, locally heavy rain improved prospects of later planted corn and soybeans in key farming areas of central Argentina. Following several weeks ofscattered showers that missed some production areas, multiple frontal passages produced rainfall in excess of 50 mm throughout La Pampa, Buenos Aires,Entre Rios, and southern sections of Cordoba and Santa Fe. Weekly average temperatures were 2 to 3°C below normal in the affected area, although daytimehighs still reached the upper 20s and lower 30s (degrees C) on several days between the rain events. Nighttime lows fell below 5°C in some of thetraditionally cooler locations of southern Buenos Aires, but no damage from frost was expected. Some of the rainfall reached northern Argentina, but amountswere generally lower than those recorded last week. In fact, little to no rain fell over a broad area stretching from northern Cordoba to western Formosa,including key cotton producing areas of Chaco, northern Santa Fe, and Santiago del Estero, which recorded abundant rainfall last week. Weekly temperaturesaveraged up to 2°C above normal in some of these drier areas, with daytime highs approaching 40°C.

BRAZIL:Beneficial rain covered most major summer grain, oilseed, and cotton areas. Rainfall was highly variable in the south, with most areas recording at least 25mm; exceptions included Rio Grande do Sul and parts of Parana and Sao Paulo that received heavy rain last week. Weekly temperatures averaged within1°C of normal, with daytime highs mostly in the lower 30s (degrees C) maintaining seasonable levels of crop growth and evapotranspiration. Elsewhere, heavyrain (50-150 mm) ended a dry spell from northeastern Mato Grosso do Sul to western Bahia, providing timely moisture for the region’s main-seasoncorn, soybeans, and cotton. Heavy rain (greater than 100 mm) covered a large section of Mato Grosso, slowing soybean harvesting but boosting moisturereserves for planting second season (safrinha) corn. Weekly average temperatures were 1 to 3°C above normal in central and northeastern Brazil, withdaytime highs reaching the middle and upper 30s. Some of the highest temperatures were recorded in far northeastern Brazil, where the dryness aidedharvesting of sugarcane and cocoa but further taxed irrigation reserves depleted by an extended period of unseasonable warmth and dryness.











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Soybean Meal Daily Soybean Meal Weekly

Mar 13 Corn Daily Chart Corn Weekly Chart

Mar 13 Soybean Daily Chart Soybean Weekly Chart






Mar 13 Mpls Spring Wheat Daily Chart Mpls Spring Wheat Weekly Chart

Mar 13 CBOT Wheat Daily Chart CBOT Wheat Weekly Chart

Mar 13 KBOT Wheat Daily Chart KBOT Wheat Weekly Chart






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Weekly Comments - Amazon S3 · Weekly Comments [email protected] Office 1-877-365-3744 Friday March 8, 2013 (an equal opportunity provider) The information contained herein was obtained