Highlights, Hogs, Rain Days Update 6/12/22
- Wright Team
- Jun 11, 2022
- 2 min read
Highlights
Smithfield Foods Inc. is the largest pork processor in the US by volume. It is closing an 1,800 employee plant in California due to the shrinking size of California’s hog herd. Animal rights and environmental regulatory costs shrunk the hog business and raised pork processing costs to eliminate profitable operation of a hog packing business.
For three months, we heard talk about terrible food shortages on the horizon due to Ukrainian corn and wheat not being available to the world marketplace. So why did USDA not increase US wheat exports and actually reduced US corn exports 45 million bushels on the June S&D? Somebody is lying.
Knobbe Ag of Houston has been trading ethanol, corn, soybeans, and cattle for 25 years. They told their clients yesterday:
Cash corn buyers all agree 1.4 billion bushel corn carryout feels too high as BASIS acts like corn supplies will not make it until new crop. Price is not rationing demand. June 30th stocks could surprise. In the meantime, weather, weather, weather.
First of all, the old (2021) crop carryout is 1.48 billion bushels. The 2022 crop carryout is 1.4 billion bushels. Secondly, basis is more firm nationwide than last year, but not much. On the other hand, futures are about a dollar higher than a year ago.
Note: Basis is usually weaker when futures are higher and basis is more firm when futures are lower. Why? Because most farmers are cash price sellers. All grain producers should be basis sellers and futures sellers. Make two marketing decisions each year instead of one and capture an extra 15 to 30 cents per bushels every year.
On May 17, Iowa enacted a law requiring gas stations to offer gasoline containing 15% ethanol (E15). Iowa is the first state in the nation to adopt such an E15 standard.
For the week ending June 4: 369 barges moved down the Mississippi River, 225 fewer barges than the previous week.
Rain Days Update
The Western Corn Belt has 4 less rain days in the 10 day forecast than yesterday and the Eastern Corn Belt has 4 less rain daysthan yesterday.
The 6 to 10 day forecast updated every day at: https://www.cpc.ncep.noaa.gov/products/predictions/610day/
Explanation of Rain Days
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