Update for October 30th, 2019
Update for October 30th, 2019
The weekly Crop Progress and Condition Report raised the GD/EX rating for corn by 2% from last week to 58%. While several notable states saw improving conditions a few have seen conditions drop off. Some of the most notable states that saw a change in ratings:
Illinois which saw a +9% jump in corn crop conditions
South Dakota increased GD/EX rating by +2%
Indiana and Minnesota both saw conditions improve by +1%
North Dakota and Nebraska both saw conditions fall by -3%
Michigan fell off by -1% from the previous week
Harvest remains far off from the historical pace. Currently the U.S. corn harvest is estimated at 41% completed vs the average of 61% for this point of the season. The graph below details corn harvest progress by state.
The weekly Crop Progress and Condition Report estimated that 97% of the soybeans are dropping leaves and harvest is 62% complete. There are some major harvest delays in states where winter weather will soon arrive (or has already arrived) which adds additional urgency to the progress. A few to note:
North Dakota has harvested an estimated 29% of the crop compared to the historical pace of 91%
South Dakota has reached 53% harvested vs 90% by this time
Minnesota is 62% harvested vs 93% historically
Wisconsin has 46% of the crop harvested vs the normal 73%
As we look at exports there are a few things happening of considerable importance to U.S. soybean exports. Of course the progress with trade negotiations with the Chinese is at the top of the list but a change in the existing government in Argentina has added new uncertainty. The people of Argentina recently elected a new president and vice president. There is concern within the country that the new administration may plan to change Argentine ag policies which would increase taxes on bushels sold for export. Because of this potential policy change it’s thought that producers may unload all of their stored bushels before the existing president leaves office. In the long run the hike in taxes will make Argentine soybeans less attractive in the global market but in the meantime a flood of soybeans out of Argentina could place added pressure on U.S. soybean exports.
The graph below details soybean harvest progress by state.
A final decision regarding payment of the second installment of MFP 2 will be not be made by the USDA. Instead White House officials including President Trump the National Economic Director Larry Kudlow along with the Office of Management and Budget will make the final call. One farm policy analyst said, “With the criticism Trump and USDA Secretary Sonny Perdue are getting relative to the recent RFS proposed rule, the last thing they need is to pullback from announcing MFP 2 payments.” A decision regarding the second installment is expected in November followed by a decision regarding the third installment sometime in January.
Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin spoke by phone last week with Chinese vice Premier Liu He. Following the conversation they gave a statement saying, “Made headway on specific issues and the two sides are close to finalizing some sections of the agreement”. In addition to the Chinese agreeing to purchase $40 to $50 billion of U.S. farm goods there has been headway made on several topics important on to each country.
Hearings regarding the EPA’s biofuel blending waivers are scheduled for this week. Testimony from the both sides of the issue will take place with officials from Renewable Fuels Association, World Energy, Siouxland Energy Cooperative and the American Fuel and Petrochemical Manufacturers taking part in the hearing. The House hearing scheduled for Tuesday was titled “Protecting the RFS: The Trump Administration’s Abuse of Secret Waivers”. Issues concerning the administrations use of waivers to exempt oil refiners from blending requirements has angered corn producers and biofuel manufacturers that have seen a loss of demand and ethanol plants shut down. Wednesday the public meeting on the EPA’s proposed biofuels rule will be held in Michigan. Politico reports that EPA officials are expecting to hear compelling arguments from both sides of the issue, biofuel producers have requested that the administration reconsider the proposal and are threatening legal action if the rule is finalized.
Many parts of the Upper Midwest received some light snowfall overnight but that is not the end, the next storm system is forming to the west and will bring with it more snow to the area Wednesday night into early Halloween day. There has been huge swings in this forecast over the past several days regarding where the system will track and how much snowfall to expect. The GFS and EURO models have varied widely on both of these points but now the models are fairly close to the same. The EURO model is shown in the map below.
Looking ahead at the 6 to 10 day forecast, expect the abnormally cold temps to remain in place along with below normal precipitation for the first week of November.