Grain Piles Move North
By Katie Micik
Friday, October 5, 2012 5:33PM CDT
OMAHA (DTN) -- James Valley Grain in Oakes, N.D., usually piles 2 million bushels of soybeans on the ground during harvest, but this year that pile has grown to more than 3.2 million bushels."
http://www.webercommodities.com/index.cfm?show=4&id=0702BF51
A 3.5 million bushel bean pile in Oakes, N.D. (Photo by Myron Jepson)Drought has lowered yields and reduced the likelihoods of grain piles in some areas of the country, but other areas are seeing large piles of grain and oilseeds waiting to be shipped out in the midst of an early harvest.
Myron Jepson, the elevator's general manager, said they loaded 400,000 bushels onto a unit train Tuesday, and that's all the spare capacity they have left for soybeans until the next train arrives on Friday. And on Wednesday afternoon, he started his second 2-million bushel pile of corn.
"We continue every day to think that we should be winding down on this harvest and it still surprises us every day," Jepson said. Bean harvest in North Dakota is 80% complete as of Sunday, representing a 52 percentage point jump in two weeks and way ahead of the five-year average. This summer, Jepson expected yields to average 32 to 35 bushels per acre, but they're actually more like 42 to 45 bpa.
Soybean piles are growing rapidly all over the state, said Country Hedging market analyst Tregg Cronin, including in Kindred, Minot, New Rockford and as far south as Gettysburg, S.D. The piles are partly due to early, strong harvests and partly due to transportation hiccups such as the union dispute at port terminals in the Pacific Northwest.
"They had a huge wheat crop. The bean crop came earlier than they thought. The corn crop is coming earlier than they thought, railroad performance has been somewhat suspect and now we have the PNW lockout right in front of the markets," Cronin told DTN. "They just don't have a lot of space. Piling is about the only option they can do, and hopefully they can pick it up as quickly as they can."
Jepson gives credit for the above average soybean crop and strong corn yields to North Dakota's favorable subsoil moisture at the start of the season. Dryland corn yields are averaging 155 to 160 bushels per acre in his area while irrigated yields are running between 220 and 250 bpa without any quality concerns.
Jepson expects his elevators will handle a record volume this year, with total grain put-through expected to be 32 million to 35 million bushels. The previous high was 30 million bushels.
But while North Dakota's bins are bursting, much of Midwest is still facing a drought-driven deficit, particularly in corn. That's why trains of North Dakota corn are headed to the southeast feed markets, ethanol plants in Illinois and feedlots in Texas, Cronin said. Elevators in some of the driest areas of Corn Belt need the high quality good corn to blend down aflatoxin levels, increasing the pull on North Dakota's crop.
Late season rains helped boost soybean crops in many parts of the Corn Belt, and Cronin said the reports he gets out of Indiana, Ohio and Illinois keep showing that soybean yields there are better than expected.
"There's going to be a bigger shortage on the corn crop than there is in the beans, so I don't know if there will be the same demand pull" to divert North Dakota soybeans to interior destinations, Cronin said.
If soybeans did move inland, they'd be headed to the Mississippi River for export through the Gulf, but Cronin said Gulf basis values aren't indicating a shortage, and therefore need, to pull beans from the north.
Instead, North Dakota's beans are likely to sit on the ground for a while.
The International Longshore and Warehouse Union is in a labor dispute with all but two of the grain export terminals in the PNW. The current contract expired on Sept. 30, but union workers have said they'll remain on the job until the middle of October while they hope to negotiate an agreement.
If the workers go on strike, it could slow down shipments of soybeans to the PNW, but likely shouldn't stop it all together, Cronin said.
Two terminals -- EGT and Kalama Export Co. -- have separate contracts with the union workers that will allow them to hire nonunion workers in the case of a strike. That will help keep them running efficiently in the case of a strike. The rest of the elevators are in a tougher position, but Cronin said they've been preparing for a strike and will likely be able to keep loading ships, albeit at a slower pace.
The elevators' ability to keep loading vessels could pressure the ILWU into make concessions.
Cronin said bids out of the PNW are stronger in November than they are in October, "So I think it's kind of the general assumption that either the strike will be over or they'll be operating more efficiently by November."
The soybeans that went into Jepson's pile were extremely dry, he said, and he'd be comfortable leaving them outside a little longer than normal. "If there was any moisture in there I probably wouldn't trust it past December. The pile of corn is a little more forgiving."
And the corn that's coming in is drier than average at 13% compared to a more typical 16% or 17%, which is the top concern Jepson's heard from farmers.
"I wouldn't want to be a propane salesman in this town right now. It's going to be a tough year," he said.
Katie Micik can be reached at katie.micik@telventdtn.com
(CC/CZ)
By Katie Micik
Friday, October 5, 2012 5:33PM CDT
OMAHA (DTN) -- James Valley Grain in Oakes, N.D., usually piles 2 million bushels of soybeans on the ground during harvest, but this year that pile has grown to more than 3.2 million bushels."
http://www.webercommodities.com/index.cfm?show=4&id=0702BF51
A 3.5 million bushel bean pile in Oakes, N.D. (Photo by Myron Jepson)Drought has lowered yields and reduced the likelihoods of grain piles in some areas of the country, but other areas are seeing large piles of grain and oilseeds waiting to be shipped out in the midst of an early harvest.
Myron Jepson, the elevator's general manager, said they loaded 400,000 bushels onto a unit train Tuesday, and that's all the spare capacity they have left for soybeans until the next train arrives on Friday. And on Wednesday afternoon, he started his second 2-million bushel pile of corn.
"We continue every day to think that we should be winding down on this harvest and it still surprises us every day," Jepson said. Bean harvest in North Dakota is 80% complete as of Sunday, representing a 52 percentage point jump in two weeks and way ahead of the five-year average. This summer, Jepson expected yields to average 32 to 35 bushels per acre, but they're actually more like 42 to 45 bpa.
Soybean piles are growing rapidly all over the state, said Country Hedging market analyst Tregg Cronin, including in Kindred, Minot, New Rockford and as far south as Gettysburg, S.D. The piles are partly due to early, strong harvests and partly due to transportation hiccups such as the union dispute at port terminals in the Pacific Northwest.
"They had a huge wheat crop. The bean crop came earlier than they thought. The corn crop is coming earlier than they thought, railroad performance has been somewhat suspect and now we have the PNW lockout right in front of the markets," Cronin told DTN. "They just don't have a lot of space. Piling is about the only option they can do, and hopefully they can pick it up as quickly as they can."
Jepson gives credit for the above average soybean crop and strong corn yields to North Dakota's favorable subsoil moisture at the start of the season. Dryland corn yields are averaging 155 to 160 bushels per acre in his area while irrigated yields are running between 220 and 250 bpa without any quality concerns.
Jepson expects his elevators will handle a record volume this year, with total grain put-through expected to be 32 million to 35 million bushels. The previous high was 30 million bushels.
But while North Dakota's bins are bursting, much of Midwest is still facing a drought-driven deficit, particularly in corn. That's why trains of North Dakota corn are headed to the southeast feed markets, ethanol plants in Illinois and feedlots in Texas, Cronin said. Elevators in some of the driest areas of Corn Belt need the high quality good corn to blend down aflatoxin levels, increasing the pull on North Dakota's crop.
Late season rains helped boost soybean crops in many parts of the Corn Belt, and Cronin said the reports he gets out of Indiana, Ohio and Illinois keep showing that soybean yields there are better than expected.
"There's going to be a bigger shortage on the corn crop than there is in the beans, so I don't know if there will be the same demand pull" to divert North Dakota soybeans to interior destinations, Cronin said.
If soybeans did move inland, they'd be headed to the Mississippi River for export through the Gulf, but Cronin said Gulf basis values aren't indicating a shortage, and therefore need, to pull beans from the north.
Instead, North Dakota's beans are likely to sit on the ground for a while.
The International Longshore and Warehouse Union is in a labor dispute with all but two of the grain export terminals in the PNW. The current contract expired on Sept. 30, but union workers have said they'll remain on the job until the middle of October while they hope to negotiate an agreement.
If the workers go on strike, it could slow down shipments of soybeans to the PNW, but likely shouldn't stop it all together, Cronin said.
Two terminals -- EGT and Kalama Export Co. -- have separate contracts with the union workers that will allow them to hire nonunion workers in the case of a strike. That will help keep them running efficiently in the case of a strike. The rest of the elevators are in a tougher position, but Cronin said they've been preparing for a strike and will likely be able to keep loading ships, albeit at a slower pace.
The elevators' ability to keep loading vessels could pressure the ILWU into make concessions.
Cronin said bids out of the PNW are stronger in November than they are in October, "So I think it's kind of the general assumption that either the strike will be over or they'll be operating more efficiently by November."
The soybeans that went into Jepson's pile were extremely dry, he said, and he'd be comfortable leaving them outside a little longer than normal. "If there was any moisture in there I probably wouldn't trust it past December. The pile of corn is a little more forgiving."
And the corn that's coming in is drier than average at 13% compared to a more typical 16% or 17%, which is the top concern Jepson's heard from farmers.
"I wouldn't want to be a propane salesman in this town right now. It's going to be a tough year," he said.
Katie Micik can be reached at katie.micik@telventdtn.com
(CC/CZ)