(Farm and Ranch Guide) – As the soybean trade looks ahead to the 2014 growing season, elevators in the upper Midwest have logistical concerns.
Elevators in portions of Minnesota, North Dakota and Canada are dealing with a lack of rail cars, and that’s creating a situation where some elevators cannot offer 2013 bids.
Betsy Jensen farms near Stephen, Minn., which is about 50 miles south of the Canadian border. She markets her own grain and is editor of Prairie Grains.
“We honestly might have to ship our wheat down to the Twin Cities and our soybeans to Mankato,” Jensen said. “I’ve traveled on I-29 three days this week – and it’s been me and Canadian grain semis.
“I don’t know what’s on those trucks, but it’s Canadian grain coming south because they don’t have the rail capacity to move it.”
She added that one elevator in her area was not bidding on 2013 soybeans. Their first bid was for November 2014 soybeans.
Rail is a frustrating concern, she said, and farmers are beginning to worry that the U.S. could lose export business if shipments cannot reach the ports in a timely manner.
“The only thing holding us back is the rail situation,” Jensen said. “We are fortunate we don’t have it quite as bad as the Canadians do when it comes to rail transport, but the difficulty is moving this grain to our export facilities.
“That could be the only hiccup we see in export sales.”
As of mid-March, the U.S. had 2013 weekly soybean export sales of 546,800 metric tons (20.1 million bushels) – but that included 534,900 metric tons (19.65 million bushels) for 2014 soybeans.
Soybean export sale commitments reached 107 percent of the USDA forecast for 2013, with 96 percent of the forecasted amount shipped.
On the CME Group exchange, soybean futures traded on March 28 with May at $14.35, July at $14.06, August at $13.52, September at $12.47, November at $11.89, and January 2015 at $11.90 per bushel.
Compared with prices on March 14, the May future was 41 cents higher, July was 29 cents higher, August was 14 cents higher, September was 12.5 cents higher, November was 14 cents higher and January 2015 was 11 cents higher.
Jensen encourages growers to glance at the March 31 Grain Stocks report. The report is available at nass.usda.gov, along with the Prospective Plantings report.
While the USDA’s World Agricultural Supply & Demand Estimates (WASDE) has a lot of information, the figures are estimates. The Quarterly Grain Stocks report is based on actual survey results.
“The quarterly stocks report is their check,” she said. “When they are calculating how many bushels are being used, the WASDE doesn’t actually count those bushels. The Grain Stocks report gives us an indication of how accurate we are for the 2013 supply estimates.”
With the release of the March 31 Prospective Plantings report, the trade shifted its gaze to the 2014 growing season.
At one elevator in western Minnesota followed in this column, the bid for cash soybeans on March 28 was $13.40 per bushel with a basis of 68 cents under. The price rose by 5 cents since March 14, and the basis narrowed by 7 cents.
The elevator was offering an October bid of $11.11 with a basis of 80 cents under, making it difficult for farmers to plan ahead.
“Once again, we are seeing the soybean market become sharply inverted,” Jensen said. “We’re talking a $2 inversion from the 2013 to the 2014 crop.”
