Update for April 29th, 2020
The Paycheck Protection Program has received additional funding but will likely run-out of money by the end of the week or early next week so if you’re interested you must act quickly. There has been a lot of confusion and misinformation regarding farmer’s eligibility for the program, but any farmer that shows a profit on Schedule F Line 34 qualifies for the PPP. Many producers do not have 2019 tax returns completed so 2018 tax returns are also accepted. The form is short, easy and quick to fill out and can be found at this link: https://www.sba.gov/sites/default/files/2020-04/PPP-Borrower-Application-Form-Fillable.pdf
Phase 1 corn purchases from China that we heard were “in the works” a week ago have not yet materialized. There are positive indications that they will make good on the agreement but no one knows exactly when this will happen. Continued uncertainty in ethanol production and declining livestock numbers have tanked corn prices over the past several weeks. The weekly corn inspections report was better than anticipated but was not nearly positive enough to move the market higher considering the continued plummet in crude oil prices and the cooperative planting weather the Corn Belt has seen. Soybeans prices have also been trending lower for some time now and new estimates for increased soybean acres and a cheaper supply out of South America are keeping pressure on prices. Adding stress to the all market prices are the spec funds, they were the largest sellers last week at 49,956 contracts bringing their total short position to 140,670 contracts. But there is a new development that could lend support to the market in the days ahead, President Trump has decided to require U.S. meat processing plants to remain open by declaring them critical infrastructure. This decision was made in an attempt to end the mounting disruptions to the food supply chain by ordering the consistent flow of goods from the farm to the grocery store remains steady and reliable. The weekly corn inspections report was better than anticipated but is not enough to move the market higher considering the continued plummet in crude oil prices and the cooperative planting weather the Corn Belt has seen.
USDA reports that corn planting is 27% complete, 7% higher than the 5 year average. Several of the largest U.S. corn production states are off to a great start:
Iowa 39% planted vs 20% average
Illinois 37% planted vs 31% average
Minnesota 40% complete vs 19% average
A few states are lagging behind their normal planting averages Missouri is currently the furthest behind running 21% behind normal with only 25% of the corn planted vs the average of 46%.
Monday the USDA reported 8% of the U.S. soybean crop is planted vs a 4% average. Once again, the largest production states of Iowa, Illinois, Indiana and Minnesota are receiving great planting conditions and are running ahead of the normal pace for this date.
New legislation introduced in the U.S. House calls for an additional $50 billion in aid to farmers in the next COVID-19 economic relief bill. This would be additional funding to the $23.5 billion currently secured for ag assistance in the CARES Act. Most reports indicate that the USDA plans to cap direct payments at $125,000 per commodity with a max payment to any individual of $250,000, this new legislation would prohibit the USDA from placing such maximum limits. A group of 28 U.S. Senators have expressed their concerns with the limits and have sent a letter to President Trump asking that the payment limits for livestock, dairy and specialty crops be eliminated before the final details are announced. (Brownfield Ag)
President Trump is being urged by members of the ethanol sector to provide aid to the nation’s biofuels industry. The American Coalition for Ethanol (ACE) asked that the president direct members of his cabinet to formulate a plan to support the renewable fuels sector, comparing it to the push for oil industry spending that the president has requested. The head of ACE, Brian Jennings told President Trump in a letter “Now is the time your leadership, in support to America’s farmers and the renewable fuels sector, can help cut through bureaucratic red tape and respond to the mounting economic harm. A more urgent response is needed. The administration has tools that can be deployed with the necessary political will.”
Eastern portions of the Corn Belt are receiving rain and thunderstorms today but once the front passes there are several nice days expected before the next chance of rain arrives.
6 to 10 day outlooks for May 4th through the 9th shows a large portion of the U.S. should expect below normal temps. The Upper Midwest can expect less rainfall than normal, assisting farmers with spring planting progress.