A Very Merry Christmas and Happy New Year to All!

From all of us at Wilco, we want to thank you for a good year in 2012.  We can’t be successful without your help. And our goal is for you and your operations to have the very best success possible. So we are in it together.  We hope that everyone enjoys the time with family and friends, because that is most important. Let’s make a plan to get together soon in the New Year and craft our plan for continued positive results for 2013.  Until then Wilco wishes ………………

“A Very Merry Christmas and Happy New Year to All!”

Wilco Agronomy University

Save the date: January 3, 2013

Wilco would like all of you to save the date of January 3, 2013, when we would like you to “go to school”. Wilco Agronomy University that is.  Wilco U.  will be holding a series of “classroom” discussions covering grasses/cereals, berries/vegetables, Hazelnuts, and general agricultural principles.  

Please see the attached “class schedule” for the times for the individual classes.  Pesticide recertification credits have been applied for with the Oregon Department of Ag. for some of the classes.

View and download the agenda here.

The morning’s events will be held at the Salem ConferenceCenter, 200 Commercial St., SE, in Salem, beginning at 8:00am, on January 3^rd, 2013.  Lunch will be provided by Wilco following the morning’s activities.  Wilco CEO, Doug Hoffman, will be giving a lunchtime presentation in conjunction with Oregonians for Food and Shelter.

For your attendance an RSVP is requested by December 27, 2012.  RSVPs can be directed to cc@wilco.coop, or by calling 503-845-6122.  Please see attached flyer for all of the details.

We really look forward to see you there . . . . . . .

Market Update

It was good to see many of you in person at the Oregon Seed League meetings in Salem. While we were talking about grass seed, and Hazelnuts and Blueberries, the USDA came out with their monthly supply and demand report.  And the resulting market action was as we have seen before. Prices going lower.  That is, the agency reports some inventory and export numbers that almost immediately the trade starts to scoff at.  For example the report says that there will be 50 million bushels less export of wheat for the year and then of course that number shows up in the ending year carryout.  Mainly this cut (45 million bushels worth) in exports and ending year increase in stocks came from the Hard Red numbers……….where it has been dry as bone for next year’s crop.  White wheat export expectations were raised 10 million bushels!

The USDA raised Australian wheat production a million tons to 22 million tons while Australia itself says 20.5 million tons.  Argentina’s wheat production was kept at the prediction of 11.5 million tons when many think it might go down to 9.5 million tons.  And as we heard at the Seed League meetings it sounds like an export ban for wheat from Argentina might be coming. 

So what to make of the report.  We have been there and suffered on pricing before following a release of a USDA report. As we know the big buyers usually come to town to buy on these price dips and it is hard to not recognize that the PNW may not have a lot of wheat inventories to carry us through to new crop. I hope 12/12/12 is a lucky day for you all . . . . . . . . .

Market Notes and Observations

December 7, 2012

The Chicago wheat market continued its trend of treading water for the week in pricing, finishing up almost a point at the close.  The PNW continues to have a very good positive basis to Chicago.  Speaking of treading water; we have talked briefly before about what the Midwest drought is doing to the Mississippi River. 

A coalition of agricultural groups has petitioned the President to have the Army Corps of Engineers “fix” the problem.  The particular stretch of the river that is problematic is the 200 miles north from St. Louis, MO, to Cairo, IL.  The Missouri River dumps into the Mississippi at St. Louis.  The Army Corps has suspended any releases of water from a large reservoir on the Missouri near Yankton, South Dakota, due to severe drought conditions.  It is estimated that the delivery of 300 million bushels of grain and oilseeds would be affected in this month and in January if the situation doesn’t improve.  That is $ 2.3 Billion worth of goods.  In addition, it is estimated the movement of 500,000 tons of fertilizer would also be impacted. As I have said before we can share . . . rain that is.

But speaking of the underlying cause of the diminished draft in the river-the drought- it isn’t getting better.  It is now estimated that 25% of the Hard Red Wheat acres will be abandoned due to severe drought.  The average is 19.5%.  The average is high due to Oklahoma and Texas farming practices. In any one year (especially depending on drought and prices) 25-35% of Oklahoma wheat acres are abandoned generally to grazing for cattle. In a bad drought year in Texas that abandonment number can reach 65%.  Generally in Kansas the largest wheat growing state the abandonment number averages 5%, but can go to 16% on a year like this.  When all of the Hard Red states are reeling like this the entire U.S wheat production numbers suffer.  

In the Corn Belt (especially west of the Mississippi) there is overall a 6” rainfall deficit, which is the driest since the bicentennial year of 1976.  This rating is based on 117 years of rainfall records. The 1976-77 season went on to have a very wet spring and summer which resulted in a harvest that was only 5% below the trend line.  Those areas of the country better get going on soil moisture.  They can plant record acres of corn in the spring, but they need soil replenishment now, big time.  The USDA is predicting the smallest corn carryout in ten years which leaves just a three week supply before new crop harvest would occur. From talking to growers in the Valley here, our rainfall is playing havoc a bit with our wheat crop, too.  

Farming, don’t you love it? I do.  Have a good weekend . . . . . . . . . .!

Mike Wilhoit, Key Account Representative

Wilco-Winfield LLC

Wilco Market Review

December 6, 2012

Market finished up today at this morning’s close in Chicago for March wheat futures.  That is 2 whole points.  Exports were on the low end of expectations, but as you can see the deferred month cash prices have slowly risen and are certainly decent . . . . .  as we have been expecting, these later months should see good buyer demand on a year in the PNW with lower acres and production than last year when inventories ended really tight.

Dry and warm continues in the Hard Red growing area, where dormancy is now on.  Here we go again . . . .Russian weather forecasters are talking about the coldest winter in twenty years.  What do those weather guys know ……?  But what we should know is that when the clock strikes to 2013, we will be in our seventh year of wheat pricing and demand being front and center.  I guess it is real now.

I know it is big print below…..a quick cut and paste, but these dates were called to my attention by a local grower.  That is the dates listed below are the new deadlines to report you crops and acreage to your local FSA office.  These reporting dates have changed appreciably.  Even if you are not enrolled in a program administered by the FSA and you just want to report your acres for a yield history, these are the deadline dates. 

Wilco Grain Market Update

December 4, 2012, 4:43 PM CT

With drought everywhere and Egypt coming to town to buy, you would think Chicago would get dressed for the dance.  Instead at this morning’s close March wheat futures finished off 4 points to extend the losing streak.  The PNW basis is still strong but we need Chicago to cooperate more so we can get back to at least where we were just a week ago on local prices. I believe tightness of inventories still lies ahead.

What lies ahead for the Midwest is not looking good . . . .at this point.  We may yet see the Mississippi River closed due to low water.  Of the 12 recognized top corn states, Nebraska is by far the driest.  From July 14 to Dec. 1, normal rainfall is 11”.  So far during the same time frame they have gotten 3.89” They grow wheat there too.  Even Minnesota is dry with the normal rainfall from July-December at 12.94”, and that state only receiving 6.46”.  Can we lend them some rain?  At the Portland Airport (where it is a bit drier than other parts of the Valley for sure), we are 13 inches above normal for the total year. Of important corn states, only Illinois, Indiana, and Ohio are about normal for rainfall July-December. Look for a bounce in our pricing…….




Mike Wilhoit
Wilco Key Account Representative

US Farm and Ranch Alliance Spokesperson Search

Hello to all,

St. Paul, Oregon farmer Brenda Kirsch, is one of nine finalists for the U.S. Farm and Ranch Alliance Faces of Farming and Ranch spokesperson search.  Online voting is underway now.  Once you have registered (they will not sell or otherwise share your personal information), you can vote once per day through December 15.  Please support Brenda with your votes USFRA is a national coalition of agriculture and commodity groups. Brenda and her father Paul are members of Wilco with their Kirsch Family Farms.  Oregon and all of agriculture will benefit by having Brenda as our spokesperson.

Please visit the sites listed below, register, and vote each day for Brenda for this position

http://www.fooddialogues.com/faces-of-farming-and-ranching/brenda-kirsch#.ULz3RbcdhzM.email

www.fooddialogues.com

Mike Wilhoit, Key Account Representative
Wilco

Market Commentary Wilco

December 3, 2012

Good news over the weekend for SWW did not translate this morning into results we could understand.  That is, it was announced that the state buying bureaucracy for Egypt had purchased 6 million bushels of SWW from the Pacific Northwest for delivery in January and February of 2013. So it was hard to understand why the Chicago wheat futures market finished off 4 at this morning’s close.  

The announcement of this purchase should eventually (if not today) work to further strengthen our market out here.  This is a first for 2012-13 U.S. crop going to Egypt the world’s largest importer of wheat.  As you remember we had a bit of a selloff at the end of last week, so it looks like Egypt was quickly buying on a price dip.  Three of the exporters in the PNW were involved in the sales. Remember how we finished very tight in supply at the end of last year’s crop, which was a bumper one?  Well, this year with so much wheat already being sold, and less production and acres, this sale will only tighten supplies.

Wilco Daily Wheat Market Analysis

Chicago wheat futures for December hemmed and hawed today, before finishing up one point at this morning’s close.  Weekly export numbers issued last Friday showed strong exports for the three major grains.  SWW exports were over 5 million bushels which is excellent.  Port of Portland security officers did not strike on Sunday, agreeing to a contract that lasts just two years.  But this averted a very bad situation for Portland where the remaining container shipping companies well could have decided to never come to Portland again. Now we will hear this Wednesday whether the longshoremen at the grain terminals will accept the “last and final” contract offer from the terminal owners. 25% of all the grain exported in the U.S. goes down the Columbia River.  The water levels in the Mississippi continue to go lower, so the PNW in the short run will be very important for exports.

Markets were also affected . . . . . again . . . . . by European debt news, particularly what is up with Greece.  At the end of last week European “higher ups” could not decide to even cut their administration budget (which is running 6% of total expenditures) in light of all the debt problems.  PNW prices did bump a little north today.  Crop progress report later today.  Look for the Hard Red Wheat numbers to continue to fade.

Mike Wilhoit, Key Account Representative

Happy Thanksgiving!

As we all sit down with family and friends for a bit (more than a bit probably)  of good food and good cheer, let’s really try to be thankful for our gifts.  Where all of us are today with our operations and businesses just didn’t happen.  A lot of hard work for a long time has got us to where we are today . . . . . has gotten the U.S. to the greatest country in the world.  There are a lot of headwinds for the country. But putting a hand out and asking it to be filled will not get the job done.  

Many times we hear the politicians talk about two hundred plus years for the U.S.  But really it is four hundred years since the first folks came to the East Coast looking for a better life and liberty.  We all like the cute pictures from the “first” Thanksgiving, but have you tried to imagine what it was like to land on a sand spit in the winter in a totally foreign land, and then figure out food and shelter and safety?  A lot of hard work for a long time.  Think about your ancestors in the farming business, persevering with horses, and axes, saving seed, keeping enough food for the winter, writing letters for the only communication, and on and on.  A lot of hard work for a long time . . . . . to get where we are today.  

So give everybody a hug and enjoy the get togethers, be thankful, and do not forget what it took to get to 2012.

Happy Thanksgiving!!

Mike Wilhoit, Key Account Representative

Wilco-Winfield LLC

200 Industrial Way-P.O. Box 258 | Mt. Angel, OR 97362

Wilco Daily Wheat Market Analysis

November 20, 2012

Not much to report today with the disinterest in the markets due to the short holiday week.  Chicago finished up just over two points at the morning close.  Weather and the longshoremen talks will continue to be the buzz amongst the traders.

It was reported in today’s Oregonian that the longshoremen at the Portland container yard have been billing one of the ocean shipping lines, Hanjin, for lost wages.  That is, every time an electrical union worker plugs in or unplugs a container at the dock the longshoremen consider that a lost work hour.  It was reported that the total wages billed to date are over $ 700,000!  Hanjin has indicated in no way will they pay.  First of all they do not hire any union labor at the port; a private company who operates the port for the city hires the union labor.  What  happen is the shipping lines will stop calling on Portland. 

In Monday’s crop progress report, Hard Red Wheat conditions declined further to 23% good/excellent, 46% fair, and 31% poor/very poor.  These are the worst numbers since the USDA began this measure in 1987.  In parts of Kansas, Oklahoma, and Nebraska, the rainfall totals this year are the lowest since records began to be kept in 1895! Our soft white ratings were as follows: 60% good/excellent, 38% fair, and only 2% poor/very poor.  The wheat in that last category is swimming for its life after yesterday’s rainfall.  A week ago in the PNW, the good/excellent rating was 73%.

Mike Wilhoit, Key Account Representative
Wilco-Winfield LLC
200 Industrial Way-P.O. Box 258 | Mt. Angel, OR 97362
Phone 503-569-0186 |Fax 503-845-9580
mwilhoit@wilco.coop  | www.wilco.coop

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