Impact of Chinese Tariffs, USDA Report Worksheet & Crop Update - Jul, 17 July 2018
Update for July 17th, 2018   Last week the USDA released their July numbers. Prior to the report the agency had signaled that they were planning to adjust for the new Chinese tariffs against U.S. crop exports in this July report which many assumed would send another shock to prices.  The market was relieved when world carryover stocks and U.S. stocks were basically left unchanged in the data. It’s expected that the world carryout for corn next year will be down 40.0 million tons from the stocks on August 31, 2018; soybean stocks are predicted to increase by 2.25 million tons which is far less than some had feared. ... view details

Update for July 12th, 2018 - Jul, 12 July 2018
Update for July 12th, 2018 Later this morning the USDA will release the July WASDE report. Traders are expecting an increase in corn, soybean and wheat carryout compared to the last report. In the past 10 years the USDA has only reduced corn yields 2 times, those years being 2008-09 and 2012-13.  The remaining 8 years saw no change from the June estimate. The higher yield expected by the trade shows the confidence traders have in the highly rated crop conditions and the improved seed genetics which they feel deserve bigger yield estimates for this July report. ... view details

USDA Report, Tariffs vs the Family Farm and Weather Forecast - Jul, 03 July 2018
Update for July 3rd, 2018 For the first time in 35 years soybean acres in the U.S. will surpass corn acres.  According to an article from Bloomberg, growers across the country planted 89.557 million acres of soybeans and 89.128 million corn acres which according data released last Friday is the most valuable U.S. crop. Corn acres were a bit above recent estimates while soybean acres were slightly lower than expected. The Quarterly Stocks Estimate found close to 40 million more bushels of corn than previously thought, soybean totals came in where expected. The total acreage of the 8 major U.S. crops which include corn, soybean, wheat, cotton, sorghum, oats, rice and barley totaled 254.3 million. This is up from the March estimate of 251.3 million and last year’s acreage of 252.1 million acres. Below is the worksheet showing the data from last Fridays USDA crop reports. ... view details

USDA Report Worksheet, Weather and Possible Heat Dome - Jun, 28 June 2018
Update for June 28th, 2018 Trade war issues have traders and the crop markets all wondering what to expect as we move further into the season with primarily favorable weather and beautiful crops growing in the fields.  The latest crop conditions ratings from the USDA were glowing and aside from the possible development of a heat dome the weather right now is not threatening to the crop as there are several opportunities for continued widespread rainfall. So in other words the forecast the market bulls have been waiting for is still nowhere to be seen. In addition there has been talk out of Washington that there may be new restrictions placed on Chinese investments in the U.S. This type of action from the U.S. will likely spark additional retribution from Chinese leaders. AgroConsult recently completed a crop tour across Brazil’s 4 largest corn producing states. Following the tour the group has reduced their May corn yield estimate of 57 million tons down to 55.2 million tons, these figures are down sharply from the 67.3 million tons grown in 2016/17.  This reduction in yield estimates is due to planting delays and prolonged drought conditions in a widespread region of the country. The USDA will announce their much anticipated June Acreage and Stocks in all Positions Reports this Friday, June 29th.  The graph below includes the average trade estimate, range of trade estimates and actual figures from the June 2017 report for comparison. ... view details

Tariffs, Crop Progress and Weather Outlooks - Jun, 20 June 2018
Update for June 20th, 2018 Right now U.S. exports face their largest uncertainty from new Chinese tariffs.  The very first item specified on the Chinese list of U.S. exports to face these new tariffs is soybeans which are then followed by, corn, milo wheat, and fresh and frozen beef. The list of goods is over 100 items long and is hitting rural America first and hard. At current price levels the U.S. holds an advantage over other soybean exporters into China.  The month of August shows a 20 cent advantage and September has a 40 advantage.  Hopefully this will help the U.S. secure late summer soybean sales. The Trump administration is working to negotiation better trade deals with key importers of U.S. products.  The hope is that this will secure export demand and improve access to the global market for U.S. farmers for the long term.  The Iowa Farm Bureau Spokesman reported that Gregg Doud, chief agricultural negotiator for U.S. Trade Representative (USTR) recently visited Iowa and held a round table discussion with Iowa governor Kim Reynolds, Iowa Agriculture Secretary Mike Naig and representatives of Ag groups from across the state.  Doud, who grew up on a farm in Kansas, told the group that he understands and appreciates that farmers are nervous, “but we want to get this right for the long term”. Doud explained that the problems they are working to repair are complex, entrenched and will take time to fix. ... view details

WASDE Update and Weekend Heat - Jun, 15 June 2018
Update for June 15th, 2018 The June WASDE report from the USDA was released on Tuesday.  Some of the important numbers to consider: Estimated U.S. corn yield was left unchanged at 174.0 bushels per acres. Exports for old-crop corn supplies were increased by +75 million bushels. New crop corn used for ethanol was raised by +50 million bushels which off-sets the -50 million bushel loss in food, seed and industrial purposes. New crop corn used for Feed and Residual was reduced by -25 million bushels. Ending stocks for new crop corn was lowered by -105 million bushels from 1.682 to 1.577 billion bushels. Ending stocks for old crop corn was reduced by -80 million bushels from 2.182 to 2.102 billion bushels. Argentine corn production was left at 33 MMT Brazil corn production was also lowered from 87 MMT to 85 MMT. Corn production from Russia is reduced based on government data showing less acres planted than previously expected. U.S. soybean yield was left unchanged at 48 bushels per acres. Old crop soybeans used for crush was increased by +25 million bushels, new crop used for crush were also raised by +5 million bushels to 2.0 billion. Soybean exports were left unchanged. Soybean ending stocks for new crop was reduced by -30 million bushels from 415 to 385 million bushels. Old crop supplies were lowered by -25 million bushels from 530 down to 503 million bushels. Argentine soybean production was lowered from 39 to 37 MMT. Brazil soybean production was increased again from 117 to 119 MMT. This also raises estimated soybean exports for the country for both 2017/18 and 2018/19 marketing years. The average U.S. farm price was left unchanged within a range of $8.75 to $11.25 per bushel. ... view details

Pre-Report Worksheet and Market Headlines - Jun, 11 June 2018
The USDA is set to announce the June WASDE report tomorrow at 11:00 a.m. CT.  Traders expect to see a decrease in old and new U.S. crop carryout, especially in corn.  Once the data is released the trade will be quick to turn attention back to current production. Below is a worksheet showing what the trade is estimating and how that compares to the May numbers. ... view details

Prices and Weather Outlooks - Jun, 07 June 2018
Update for June 7th, 2018   Corn and soybean prices have been in a tailspin thanks to several factors, one of them being weather. The months of June and July are generally when traders become more focused on weather headlines and concerns.  The delayed planting in several key growing areas this spring gave producers a bit of an early “weather market” but now that the crop is planted without many further issues we have lost some of the risk-premium the market had built into prices. There are so many contradicting forecasts outlooks for the month of June it’s really impossible to guess what to expect over the next few weeks.  Some weather models have shown hot and dry for the Corn Belt in June but as we know the weather changes quickly and right now traders see some cooler and wetter outlook models and strong crop condition ratings and they are not ready to push prices higher. Trade negotiations have whip-sawed the market a few times now.  Talks with China were originally going well and then abruptly ended with few explanations and then a couple of weeks ago they reported a deal was close and now it appears we are back to square one. NAFTA also seems to be in limbo and in addition now the U.S. is dealing with retaliations from Mexico, Canada and the E.U. enacting tariffs on several U.S. goods and products. All of the trade issues also raise questions regarding the USDA’s export estimates and the export sales data and what this all could indicate in regards to overall demand and where that could be headed as a result. Obviously the two W’s… Washington and Weather are very hard to predict so continue to pay attention to further developments. Some of the other headlines in the news: ... view details

Hot Forecast and Crop Conditions - May, 31 May 2018
Update for May 31st, 2018 Several negative factors have caused the grain markets to slide lower the past couple of days.  The most notable of these being the on again-off again trade situation with China and now with the NAFTA negotiations as well.  Traders were undoubtedly impressed by the condition of the U.S. corn crop which was included in this week’s USDA crop progress report for the first time this season.  The report showed that 79% of the U.S. corn crop is rated good to excellent which is 7% above trade expectations and 8% above the 5 year average.  In comparison to previous years this week’s corn condition rating is the highest recorded for this date since 1994 when 79% was rated good to excellent making this the best in 24 years. (The Planting Progress report is shown at bottom of newsletter).  Lack of any threatening weather outlooks also adds to the weakness in the market although there are some concerns regarding the drought affecting the Southwestern U.S.  According to recent reports, 2/3rds of this affected region is suffering from some degree of drought conditions.  Of this 40% has been classified as extreme drought which affects not only crops but livestock as well. As we look into extended outlooks for June the forecast for the 2nd week of June indicates this already parched region can expect temps into the triple digits.  This will only add to the dryness concerns facing the southern Plains.  ... view details

Planting Progress, China Trade Truce and Weather Forecasts - May, 25 May 2018
Update for May 25th, 2018 The USDA reported this week that 81% of the U.S. corn crop has been planted which is right on the mark with the 5 year average.  States that are furthest behind their normal pace are: Pennsylvania -29% South Dakota -15% Michigan -13% Wisconsin -10% Minnesota -7% North Dakota -5% Colorado -4% Iowa -2% States that are running furthest ahead of normal: Indiana +17% Illinois and Missouri are both +9% Ohio +5% ... view details

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