Update for September 11th, 2019
Update for September 11th, 2019
Pre-report expectations of traders, according to a survey by Reuters, is for a reduction of crop estimates from August for corn, soybeans and cotton. One of the most anticipated numbers tomorrow will be the latest yield estimates. Last month the USDA surprised the corn market with a significant 3.5 bushels per acre increase from the July report, nearly 5 bushels per acre higher than the average trade estimate. The soybean yield was left unchanged in August from the July report but the trade is expecting to see a 1.2 bushel per acre decrease in the September estimate. Tomorrow’s report will be the first based off from objective field survey data, farmer surveys and satellite imagery.
The weekly crop condition rating for corn was cut by 3% this week from 58% to 55% GD/EX vs 68% a year ago. Crop development continues to run considerably behind normal with only 11% of the U.S. corn crop listed as mature vs the 5 year average of 24%. Here is the estimated maturity of the corn crop in several of the major corn producing states:
Illinois-8% mature vs 35% historically
Indiana-8% mature vs 26%
Iowa-4% mature vs 17%
Minnesota 1% mature vs 8%
Ohio 4% mature vs 17%
Nebraska 9% mature vs 18%
Kansas-28% mature vs 40%
South Dakota 2% mature vs 14%
Wisconsin 0% is mature vs 11%
The U.S. soybean crop rating remains at 55% GD/EX vs last year when 68% of the crop was rated GD/EX. 8% of the soybean crop is still in the early stage of setting pods, farmers in many key production states have reported that pods are filling at a slower rate than normal. Some of the key states with a high percentage of the crop yet to set pods:
Indiana and Missouri each have 16% of the crop that has not set pods.
Wisconsin 15%
Kansas and Ohio both are at 11%
Illinois 10%
South Dakota 9%
Iowa and Nebraska both are at 6%
Informa released their latest U.S. corn and soybean yield estimates late last week. Their latest corn yield estimate was increased from 168.8 to 169.8 bushels per acre with a forecasted total production of 13.906 billion bushels. This production estimate is now even higher than the highly controversial USDA August forecasted estimate of 13.901 billion bushels. In addition they increased their yield estimate for U.S. soybeans from 48.2 to 48.4 bushels per acre, bringing their total soybean production estimate for the year to 3.671 billion bushels, slightly lower than the USDA’s August forecast of 3.680 billion bushels.
Reuter’s reports that officials from several large biofuels companies are meeting at the White House today. The focus of this meeting is to try to gain industry support for the biofuel boost package which many farm and biofuel groups as well as several farm-state lawmakers have opposed. Charles Grassley (R-Iowa) has called the proposed plan “a disaster for ethanol and corn growers” and along with fellow senator from Iowa Joni Ernst said via Twitter, “the only good deal for Iowa farmers is one that upholds the intent of the RFS.” It’s unclear now how soon we will see any form of a biofuel boost package agreed upon and implemented.
…On an alarming side note…Apparently our USDA Secretary Sonny Perdue does not understand what the term reallocation means. He said, “Reallocation is probably just a buzzword about that, when you talk about how you talk about recovering the federal waiver issues. Technically, is it reallocation or not? I don’t know, I’m not sure exactly what you mean by reallocation.”
U.S. Treasury Secretary Steve Mnuchin told Fox Business Network that the U.S. has a “conceptual” trade enforcement agreement with China so now currency will be one of the main focal points during the next round of trade talks. “I expect the governor of the People’s Bank of China to come over for these talks. So part of the conversations we will be having with them is around currency and currency manipulation.”
China has announced it will exempt 16 items from the 25% tariffs beginning on September 17th for the period of one year. This move is seen as a goodwill gesture in advance of the next round of negotiation in Washington next month. China has kept the tariffs in place on over 5,000 U.S. products including agricultural products. The Chinese Finance Ministry says that it will consider additional exemptions and make announcements “at appropriate times.”
A deal reached Tuesday between the Chinese and Argentine governments will allow the imports of soymeal from Argentina for the first time. In the past China had only imported whole soybeans from Argentina but the ongoing U.S./China trade war has given Argentina the leverage needed to convince China to import their soymeal product. Argentina is the global leader in soymeal exports and China is the world’s largest user of the product. Once again this is a significant blow to U.S. trade.
The upcoming 6 to 10 day forecast has changed slightly. The latest maps indicate the Heartland will see more opportunities for moderate rainfall to continue into next week along with above normal temps for the entire eastern two-thirds of the nation.
