Update for March 28th, 2019
The USDA will give us their Prospective Plantings and Quarterly Grain Stocks Reports tomorrow, March 29th. Pre-report estimates are looking for the March 1st corn stocks number to decline year-over-year this season which would be the first time after 5 consecutive years of increases. Soybean stocks are expected near 2.70 billion bushels which would be an increase of over half a billion bushels above last year’s record.
Lots of speculation surrounds the USDA Prospective Plantings Report due out on Friday. Many market analysts agree that while the U.S. may see a rise in preventive plant acres this year most don’t feel that the USDA will take that into account in the acreage estimate this week. It’s very likely that we will not know the extent of those acres until the FSA updates insurance claims later this season.
Even with corn export sales for the week ending March 14th showing exports near the high end of the trade’s expectation, lackluster trade news continues to plague the corn market. The new crop DEC corn contract has traded within a $0.19 ¾ cent range so far this year. According to data from INTL FC Stone the 5 year high to low trade range from January forward has averaged $1.19. The 10 year data which includes the record high range from 2012 and the lowest range during 2017 the average trade range for corn has been $1.72.
Face to face discussions have resumed this week in Beijing with more on the schedule for next week in Washington D. C. Last week China purchased 300,000 tons of U.S. corn which is the first time in years this has occurred. In addition, customs data published on Monday showed China’s imports of U.S. soybeans grew in February to 907,754 tons from 135,814 tons the previous month. These cargoes were booked following the truce reached in the trade war last fall and although they show positive growth in Chinese purchases it pales in comparison to 3.35 million tons imported in February, 2018. Inside the trade there are reports spreading that China is planning to import record amounts of U.S. pork as part of their overall trade package with the U.S. Bloomberg says the purchases could reach over 300,000 MT’s in 2019.
The severe winter weather in the Midwest is causing record spring flooding. Many states across the Farm Belt including Iowa, Nebraska and South Dakota as well as several other states have seen their ethanol plants go idle and railway shipments of agriculture products slowed or completely stopped as a result of the flood waters. The National Weather Service sees the potential for additional flooding in the weeks to come as icy tributaries in Montana and the Dakotas are beginning to flow. The Billings Gazette reported Sunday that the rapid snow melt has formed ice jams to occur causing extensive flooding along the Little Bighorn River. This has forced the closing of several portions of major highways in the eastern part of Montana reaching all the way to Wyoming. Warmer temps that are expected to reach the upper 60’s this week will expedite the snow melt, this water will eventually make its way downstream through the smaller rivers that feed into the Missouri, the nation’s longest river.
According to research data from T-Storm Weather, the wettest conditions in the past 125 years during a 13 month June-June timeframe were found during the June to June of 1926-1927 and 2010-2011. Both of these 13 month periods saw massive flooding along the Mississippi River. Data collected during the past 10 months states that the rainfall departures for June 2018 to March 2019 has exceeded the entire 13 month precipitation levels of 1926-1927 and 2010-2011. Given the current conditions they caution that flooding will become considerably worse unless we see a drier than normal pattern in April, May and June.
Planalytics, a business weather intelligence firm in Pennsylvania estimates that more than 50% of all corn and soybean acres are at risk of flooding this spring. “Planalytics… recently reported the convergence of conditions that led to what has already been described as the worst flooding disaster to ever hit the region.” The news release went on to say, “Planalytics estimates that 55% of U.S. corn acres and 60% of soybean acres are at risk of either major or moderate flooding this spring.” They estimate just 8% of soybean and 14% of corn acres are at a minimal risk for flooding this season. Most of the risk is concentrated in Iowa, Minnesota and Nebraska with additional risk found in Missouri, North Dakota and Illinois.
Weather across the Central portion of the U.S. has been fairly quiet this week but that will be changing. There is a storm system that is expected to build over Kansas and Oklahoma that will spread north and east later into the weekend. Cold air from Canada will drop in from the north and warm moist air from the Gulf of Mexico will work northward on the southern side of the system. With the two very different air masses involved with this system we will see the possibility of spring snow showers along the northern side of the system as well as heavy rainfall across the warmer southern portion.
The system will definitely be bringing more rain and snow to areas that do not need any more precipitation. Omaha is forecast to receive an inch of rain from this storm which typically doesn’t sound like a lot but with river levels at flood stage any rain is too much rain. Soil profiles are full in many areas which will lead to more water to run off from the saturated ground, close monitoring of the water systems between the Rockies and the Appalachians will be necessary over the next several days and weeks.