February 4, 2013
Weather
Precipitation in U.S. hard red winter wheat areas will remain restricted during the next week to ten days. A
storm system advertised for this coming weekend will not likely produce much moisture in the west, but eastern
areas may get 0.10 to 0.60 inch. A few showers may also occur in the east during mid-week, although only light
amounts of rain will result. Southern Plains: Warm and dry this week.
The bottom line for South America remains good for most of Brazil’s main crop areas during the coming week.
Many areas are plenty wet and need to dry down, but there has not likely been any serious production cut
because of too much rain. Delays in farming activity will continue for a while, however. Northwestern summer
grain and oilseed areas in Argentina have seen some relief to dryness, but will need follow up rain soon. The
areas missed by rain during the weekend will remain seriously stressed by dryness for at least another week,
further reducing production potentials. Australia: It seems they went from one extreme to the next. Rain over
the weekend worsened the flooding.
Speaking Schedule/ Conference Schedule
1.
**Jamie will be speaking in Freeport, IL Feb 5th for a Marketing/Crop Insurance Seminar
Harvest Restaurant – 8:30 to Noon Feb 5th
1449 W State Road, Pecatonica, IL
Crop Insurance / Marketing – Gulke Group
Estate & Business Planning – Reno & Zahm, LLP
Technology – Entre Computer Solutions
Tax Law Update: Sikich LLP
2. Feb 6th Jeff will be speaking in South Dakota: "Cultivate Your Future" Ag Event - Sioux Falls,
SD Feb 6, 2013, 9:30 am—3:30 pm, Contact Kari Phone: 605.335.5110
http://fnbsf.com/community/calendar-of-events
3. Feb 6th Jerry Speaking at the Northwest Farm Managers Conference, Fargo, ND –contact Andy Swenson
at NDSU email andrew.swenson@ndsu.edu for more info. Registration is at the door 8 am Holiday Inn
Fargo.
4. Feb 7th Fargo, ND—1-day Gulke Group Outlook-- Jerry/Jeff at Ramada Inn-contact Jeff or Ashley for
registration info.
5. Palm Springs Conference: February 11-13, 2013- THE LINK TO REGISTER IS UP ON THE WEB:
6.
http://www.gulkegroup.com/events/2013/palmsprings/index.php.
7. Chicago Conference: March 28-29, 2013
8. Beaver Creek Conference: July 10-12, 2012
Disclaimer: Commodity trading and other speculative/ hedging investment practices involve substantial risk of loss. PAST RESULTS ARE NOT
NECESSARILY INDICATIVE OF FUTURE RESULTS when utilizing the commodities markets. Gulke Group and its officers, directors, employees and
affiliates may take positions for their own accounts that are the same or that are different to the positions and to the contracts referred to herein. This
material and any views expressed herein are provided for informational purposes only and should not be construed in any way as an endorsement or
inducement to invest. Prices used in trade recommendations are already reflective of known information.
News

USDA reports private sale of 116,000 mt Soybeans to China with half for the 12/13 MY and half for
the 13/14 MY.

China's NGOIC on Monday suggested a number of soybean crushers have halted operations ahead of
the approaching Lunar New Year celebrations.

Egypt tendered for Wheat over the weekend. And purchased 60,000 mt. US Soft Red Wheat for March
1 – 10 shipment. The price was $306.80 mt. There was only one non US offer and that was from
France at $355.00 mt. No doubt US Wheat is the cheapest in the world at this time.

The Goldman roll starts Thursday and last thru Wednesday the 13th—this could affect bull spreads.

Safras Mercado estimates Brazil Soybean harvest at 6.4% complete vs. 5.2% last year and compares
to 3.1% average for this date.

Ukraine grain exports were reported down 40% in January at 1.5 mmt due to lower shipments of
Corn and wheat.

Informa on Friday estimated Argentina corn production at 25.0 mmt, which is a -2.0 mmt reduction
from prior; they also trimmed soybean estimates to 54.5 mmt, from 58.4 mmt prior. Brazil's corn
production was pegged at 70.3 mmt, an increase of +4.1 mmt from prior estimate, while soybean
production was pegged at 84.0 mmt, +1.1 mmt from their prior estimate.

Friday USDA January 2013 Semi Annual Cattle Inventory Headline Recap:












Total Cattle & Calves: 98%; expected 98%
Total Cows & Heifers Calved: 98%; expected 99%
Beef Cows & Heifers Calved: 97%; expected 99%
Dairy Cows & Heifers Calved: 100%; expected 99%
Heifer 500lbs & Over: 99%; expected 98%
Heifer 500lbs & Over - Beef Replacement: 102%; expected 100%
Heifer 500lbs & Over - Dairy Replacement: 98%; expected 99%
Steers 500lbs & Over: 100%; expected 98%
Bulls 500lbs & Over: 98%; expected 97%
Calves 500lbs & Under: 98%; expected 97%
Calf Crop: 97%; expected 98%
CFTC- Large Spec Report
Disclaimer: Commodity trading and other speculative/ hedging investment practices involve substantial risk of loss. PAST RESULTS ARE NOT
NECESSARILY INDICATIVE OF FUTURE RESULTS when utilizing the commodities markets. Gulke Group and its officers, directors, employees and
affiliates may take positions for their own accounts that are the same or that are different to the positions and to the contracts referred to herein. This material
and any views expressed herein are provided for informational purposes only and should not be construed in any way as an endorsement or inducement to
invest. Prices used in trade recommendations are already reflective of known information.
Wheat has become less negative and corn and
beans have also gained new long positions. None of
the commodities are at an “extreme” position- and
the large spec seems to merely be waffling about
waiting for a crisis in S. American weather to make
the decision on their positions. But nevertheless
this is supportive to the markets.
Comments
If you missed the Dodge Ram Commercial:
farmersforthefuture.ning.com/m/blogpost?id=2281606%3ABlogPost%3A100866 go here. If you missed our TV
appearance on This Week in Agribiz click http://farmprogressamerica.com/video.aspx/week-agribusinessfebruary-2-2013-part-5-14-1511 or http://farmprogressamerica.com/video.aspx/week-agribusiness-february2-2013-part-2-14-1508
Disclaimer: Commodity trading and other speculative/ hedging investment practices involve substantial risk of loss. PAST RESULTS ARE NOT
NECESSARILY INDICATIVE OF FUTURE RESULTS when utilizing the commodities markets. Gulke Group and its officers, directors, employees and
affiliates may take positions for their own accounts that are the same or that are different to the positions and to the contracts referred to herein. This material
and any views expressed herein are provided for informational purposes only and should not be construed in any way as an endorsement or inducement to
invest. Prices used in trade recommendations are already reflective of known information.
Weather- The outlook is warmer and wetter for the cornbelt and southern half of the plains with the NWS 6-10
day calling for above normal precip south and east of central NE which would be good timing for SRW there for
wheat grazing.
March (SH) Daily soybean chart showing a possible "double-bottom" at $13.60 that needs a close over $15 to
validate from a technical standpoint. If so, projections point to $16. The open interest in March options around
$16 adds to confidence. March soybeans up strong this morning on more tentative Arg weather could mean we
gap higher at 9:30 am. Argentina Ag Minister est. 25 pct. of their corn crop is pollinating, 4 is mature and crop is
rated 83 pct. good/ex vs. 87 previous. 70 pct. of their soybean crop is blooming/setting pods. Crop is rated 88
pct. good/ex vs. 91 previously.
Corn appears to be breaking out to the upside as well with the downtrend broken. Market still focusing on
the strong feed use reported Jan 11 and will look to the Mar 29th report for further confirmation or not.
Weekly physical US exports (not sales) are est. near 20 mil bu wheat, 13 mil bu corn and 38 mil bu soybeans.
Informa raised their est. of US soybean crush 20 mil bu. They achieved that though by raising US imports 20
mil bu. and raised US soymeal imports. This suggests that tight US old crop soybean supply could still support
old crop cash, spreads and futures. They also raised US corn feed use due to higher animal numbers. This
though was offset by an 125 mil bu drop in final exports vs. USDA numbers in order to keep ending stocks stable
but tight. Tight US old crop corn supply could still offer support to old/new spread. They also lowered their est.
US 2013/14 HRW carryout but raised SRW and HRS. This could allow KC wheat to gain on Chicago.
The wheat/corn spread has narrowed significantly in the past month. On a per lb. basis Chicago has moved to a
discount, which could boost wheat feeding enough to solve part of the corn carryout problem next summer.
LIVESTOCK :Cattle- Boxed beef prices were sharply lower with supplies called moderate to heavy. The overall
COF inventory report was near to below expectations. Total inventory is off 1.5 million head, as expected. Cow
numbers are down about 850,000 head, partially due to an upward revision of 250,000 head in last year’s cow
inventory with a minimal change in the calf crop. Even with the lower total inventory, feeder cattle supplies
over 500 lbs. outside of the feedlot are about 500,000 head larger than a year ago because Cattle on feed
numbers are off 800,000 head while heifer and steer inventory is off only 300,000. Those extra cattle aren’t on
wheat pasture, currently 1,340,000 versus 1,590,000 a year ago.
The Large Spec (non-commercial) report shows a slow but consistent movement towards increase in long
positions. Not exploding but certainly worth noting.
Markets & Recommendations
Yesterday’s Trades : Wheat – For 2012, sold 25% WH at 770 ¼($662.50 loss/contract). For 2013, sold 10% WH at
770 ¼($662.50 loss/contract) and sold 15% WN at 782.
Overnights/ Outside Markets: Dow -69.00, Dollar +.30, Crude +$1.23, Nat Gas -.019, Hogs No Overnight Trade,
Cattle No Overnight Trade, Cotton -1.28, Gold -$4.50
ADVICE: Concerns in soybeans showing more strength, essentially gapping higher based on 9:30 am trade-buy March soybeans futures against a 20% position of 2013 this morning on a pullback to best you can on 10%
and 10 percent at 14.90. Hold offsetting positions in corn. We may have exited long positions in wheat too
Disclaimer: Commodity trading and other speculative/ hedging investment practices involve substantial risk of loss. PAST RESULTS ARE NOT
NECESSARILY INDICATIVE OF FUTURE RESULTS when utilizing the commodities markets. Gulke Group and its officers, directors, employees and
affiliates may take positions for their own accounts that are the same or that are different to the positions and to the contracts referred to herein. This material
and any views expressed herein are provided for informational purposes only and should not be construed in any way as an endorsement or inducement to
invest. Prices used in trade recommendations are already reflective of known information.
soon--- hold for now. No change in livestock positions for now. The US $ is strong today and in spite of this
grains are firm to higher showing weather in S America a concern and we may begin to be focusing on US as well
as we enter the Feb crop revenue period. The spec table sell signal for cotton got hit this morning.
CORN: 2012: Hedged 85% (85% cash, 15% futures, LONG 15% CH). 2013: 50% (10%, cash, 75% futures, LONG 35%
CH). END USERS: For 2013 Q1, 80% (short 40% CH 770 puts and long cash on 40%). For Q2 and Q3 80% (short 40%
CH 770 puts, long 40% in CH).
SOYBEANS: 2012: Hedged 100% (100% cash). 2013: Hedged 70% (25% cash, 60% futures, LONG 15% SH). End
Users: For 2013: For Q3, hedged 65% in SMN.
WHEAT: 2012: Hedged 100% (85% cash, 15% futures). 2013: Hedged 75% (10% cash, 65% futures,).
SPRING WHEAT: 2012: No hedges, BUT we assume clients are following the wheat advice in Chicago wheat.
CANOLA: 2012: Hedged 40% (40% cash). 2013: Hedged 10% (10% cash)
SPEC: No trades
LIVESTOCK:
Live Cattle: 2013: no hedges.
Feeder Cattle: 2013: Producers – no hedges. End Users – no hedges.
Lean Hogs: 2013: no hedges.
Cotton: Struggling to get above 84, but surging bean prices will keep the pressure on the acres mix. Re-establish
hedges on a move below 80.00 (March contract).
Rice: Made new highs on Friday to continue the current uptrend. Resistance now is at 15.55 and then 15.86. We
are out of hedges and we will re-establish them on a move below 15.40 in the March contract.
Disclaimer: Commodity trading and other speculative/ hedging investment practices involve substantial risk of loss. PAST RESULTS ARE NOT
NECESSARILY INDICATIVE OF FUTURE RESULTS when utilizing the commodities markets. Gulke Group and its officers, directors, employees and
affiliates may take positions for their own accounts that are the same or that are different to the positions and to the contracts referred to herein. This material
and any views expressed herein are provided for informational purposes only and should not be construed in any way as an endorsement or inducement to
invest. Prices used in trade recommendations are already reflective of known information.
Disclaimer: Commodity trading and other speculative/ hedging investment practices involve substantial risk of loss. PAST RESULTS ARE NOT
NECESSARILY INDICATIVE OF FUTURE RESULTS when utilizing the commodities markets. Gulke Group and its officers, directors, employees and
affiliates may take positions for their own accounts that are the same or that are different to the positions and to the contracts referred to herein. This
material and any views expressed herein are provided for informational purposes only and should not be construed in any way as an endorsement or
inducement to invest. Prices used in trade recommendations are already reflective of known information.