Update for July 1st, 2019
Last Friday following the USDA Acreage and Quarterly Grain Stocks reports the grain markets reacted. The estimated corn acreage is undoubtedly too big and the soybean acreage estimate is also likely to see significant adjustment as summer stretches on.
Some analysts feel that the USDA should not have publicized these acreage numbers. With such a large percentage of producers across the country still attempting to plant after June 1st this report basically became just another “planting intentions” estimate. The skewed report of 91.7 million corn acres and soybean acres of 80 million have caused a big uproar throughout the agriculture industry. Arlan Sunderman, senior market analyst for Water Street Solution of Illinois told Ag Day Viewers, “It kind of confirms what we’d been hearing in late May that a lot of farmers saw what was coming, and they said, “if we can possibly get corn acres in, we want to get corn in at the expense of soybeans.” They were returning soybean seed, where it was drying up to do so, and this survey tells us that was pretty much true across the Midwest. Now, it never quit raining, so they had trouble getting those acres in, but it probably makes it difficult to see prevent planted of 10 million to 15 million.” Matt Bennett of Ag Market.Net also explained to viewers, “The fact of the matter is though, we do have a significant amount of acreage that did not get planted. We know that. How do we quantify that is going to take quite a bit of time.” The uproar from all across the Agriculture industry was heard and has prompted the USDA to announce their plans to re-survey the entire Corn Belt, including each of the key corn and soybean production states. Data from the re-survey will be compiled in time for the August Production report. Shown below is a map of the states being re-surveys and for which crops.
Bloomberg reports that President Trump and Chinese President Xi Jinping met during the G 20 Summit in Japan. The two leaders have agreed to another truce in the almost year-long trade war and to restart the negotiation that broke down 6 weeks ago. Xinhua News Agency also reported that the U.S. agreed to put no new tariffs on Chinese goods and China has agreed to purchase more U.S. farm products. (Last Friday the USDA announced that private exporters had a 544,000 tonnes sale of U.S. soybeans to China.) Following the meeting Trump told reporters, “We had a very good meeting with President Xi of China. Excellent. I would say excellent. As good as it was going to be. We discussed a lot of things and we’re right back on track.” There are still several hurdles for negotiators to work through when negotiation resume including the recent blacklisting of the Chinese owned company of Huawei Technologies. This action from the U.S. threatens to remove the Chinese company’s access to American technology. In addition the U.S. has been working to convince other allies from purchasing Huawei equipment which the U.S. believes could be used for spying by the Chinese. Xi insists that Huawei must be removed from the blacklist as a part of any deal. As of now there has been no announcement as to where or when the next round of negotiations will take place.
The latest 5-day outlook from the Weather Prediction Center calls for cool to moderate temps accompanied by more rainfall across most of the Corn Belt. Most areas are forecast to receive between ½ an inch to an inch while 2-4 inches is expected across South Dakota.
Looking at the long-range outlook that takes us through mid-July, the National Weather Service shows a continuing pattern of above-average rainfall.