MArkets Ohio’s Country Journal


Doug Tenney LeisT MercanTiLe


Managing the Market


This column is believed to be reliable and includes


the author’s opinions. Unforeseen and changing cir- cumstances can change price outlooks and direction. Neither Ohio’s Country Journal or Tenney assume liability for their use. Doug Tenney is a licensed com- modity broker. Copyright 2012, Doug Tenney, all rights reserved. E-mail address is dtenney@leistmer- cantile.com. Leist Mercantile specializes in marketing strategies and crop insurance coverage. Contact them at 1-800-231-6660.


Who is the basketball fan cheering so


loudly? Cindy and I were at the OSU- Purdue basketball game last month. It was a tight game, with numerous ties and lead changes. With just a few minutes left, the momentum and excitement in the building continued to grow. Suddenly, I realize all of the noise is Cindy beside me, screaming as if her voice might not be needed later on. She seemed pretty determined, just as pro- ducers who are yearning to push corn prices back above $6.70. Last month’s USDA supply and


demand report was quickly called a boring report. There were no major surprises,


The National Cattlemen’s Beef


Association (NCBA) and the Beef Checkoff Program partnered with Merck Animal Health to launch “Better Beef Sales,” a new web-based retail training program to help boost knowledge about beef and how it’s produced. These organizations recognized the


need for more training of meat-counter employees after Merck Animal Health con- ducted a series of consumer panels. The panels found that consumers identify the staff behind the counter as experts. Carrie Thomas, account manager for food chain


either bullish or bearish. Corn ending stocks went down due to the increase in exports of fifty million bushels. Ending stocks are now estimated to be 801 million


bushels. Note that traders were looking for the number to be 791 million bushels. Some would suggest USDA wanted to do all they could do in order to keep ending stocks above what seems to be a magical threshold of 800 million bushels. Soybean ending stocks were unchanged at 275 mil-


lion bushels. That is not a surprise as some commercial grain facilities still feel the number is very likely to reach 300 million bushels. Yet in recent weeks some private analysts would suggest soybean ending stocks could drop to as low as 200 million bushels should the soybean production problem in Argentina and Brazil continue to intensify. Last month USDA estimated Argentina soybean production at 48 mil- lion tons, down 2.5 million tons from January. Brazil soybean production was pegged at 72 million tons, down 2 million tons from January. The February 23-24 USDA outlook


meeting will be history as you read this column. It will have provided their first glimpse into acres expectations for corn and soybeans in 2012. Between now and the end of March you will see the trade talking pretty extensively, several times a week, about the upcoming Planting Intentions Report on Friday, March 30. If


affairs for Merck Animal Health, said the need for training was quickly confirmed during retailer discussions. “We conducted four panels in two cities.


One of the key take away messages from those meetings was consumers still identify the person in the ‘white coat’ behind the meat counter — the ‘butcher’ — as the beef expert,” Thomas said. “And, we want them to be beef experts. To do that, we need to arm them with information about today’s beef supply and how it’s produced.” Consumer decisions about the products they buy are far more complex than they


the Midwest enters the planting season in April experiencing the dry conditions already seen in the western cornbelt as of mid-February, December CME corn could see downside pressure to the $5.40 level this spring. It is a well known fact that the ethanol


blenders credit of 45 cents paid by the fed- eral government is now behind us. The credit was not extended by Congress, its existence ended at the end of 2011. Ethanol plants in numerous areas across the Midwest had difficulty sourcing corn for their daily grind last fall. This is evidenced by reports in Illinois where ethanol plants in December 2011 were calling in their pur- chases of February 2012 corn just to be able to keep the plant running. Not well known is the continued question of ethanol mar- gins months from now. Mid-February ethanol margins for Iowa plants were forty cents per bushel in the red. Some smaller facilities have reduced their grinds signifi- cantly compared to capacity. Another little known fact of ethanol is that this winter many facilities are exporting most if not all of their ethanol outside of the US. Ethanol stocks in the US have set several new records from Christmas to mid-February. Should Brazil or others find cheaper sources of ethanol outside of the US, don’t be surprised to see additional ethanol plants reducing their production. The question on the minds of corn pro-


NCBA beefing up knowledge at the meat case


were in the recent past. Some consumers take into account how animals were raised, sustainability, animal welfare and a whole host of practices employed by cattle-farm families and ranchers. Questions on those topics aren’t always easily addressed by the individuals responsible for putting beef on people’s plates — retail meat counter employees. This new initiative is intended to bridge the knowledge gap between the consumer and their food. The Better Beef Sales education pro-


gram consists of a series of six web-based training modules for the retail meat count-


er employees on the front lines of con- sumer marketing. Topics covered in the videos include: types and quality of beef offered today; sustainability of today’s beef; animal welfare practices; beef- improvement technologies; and ways retailers can add value to the meat case. “As cattle numbers continue to decrease


and retail beef supplies become tighter, it’s going to take more effort to keep beef cen- ter of the plate,” Thomas said . “We want to make sure retail employees and con- sumers understand how these quality products end up on our dinner tables.”


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Ohio’s Country Journal • ocj.com • March 2012 •Markets 13


ducers across the Midwest is price. What happens in thirty days? What happens in the next six months? That is not something new. But perhaps what is unusual is the huge price range that could be seen for corn in the next six months. If US corn acres approach 94-95 million acres in 2012, great growing season weather with a trend line yield of 162 bushels per acre could push corn to near $4.00 this fall. However, should weather extremes instead result in less than ideal planting weather along with a hot growing season and pollination con- cerns, some suggest corn could be closer to $8.00 this fall. Corn prices are indeed that uncertain. Pick your poison and roll the calendar. It’s like trying to catch a falling knife. You are going to get hurt. Soybean prices continue to be driven by


weather in South America. As of mid- February the trade is already projecting further soybean production declines in Brazil of 3-4 million tons below the February 9 USDA production estimates. With all of the potential production and weather uncertainties already mentioned, it is no wonder analysts are already saying 2012 will be more price volatile than last year. Yikes!


Thought for the day You do not really understand some-


thing unless you can explain it to your grandmother.”— Albert Einstein


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