USDA Report Worksheet and Planting Progress in SA
Update for October 1st, 2020
The USDA September 1 Stocks Report came in smaller than the trade had expected. Soybean stocks were an impressive 53 million bushels smaller than the average trade guess and far below 2019 September inventories of 909 billion bushels. Traders knew we were beginning to use a portion of the stored inventories on hand from a couple of years ago, but no one really knew how much of that stockpile had been used until now. We also know that China has eaten through their stockpiles too and are now purchasing a portion of their monthly needs from others. It’s obvious that there is a significant global demand for soybeans and until Brazil begins soybean harvest in January, they are basically out of the export business! This report should bring new life to prices until farmers begin selling again.
Quarterly Grain Stocks
Source: USDA, Reuters
Reports show that soy crushers in Rio Grande do Sul are importing soybeans from nearby South American countries. Last week 3 cargoes of soybeans were shipped in from Uruguay, this follows recent imports of soybeans from Paraguay, both of which also have limited supplies. Crop Consultant Dr. Michael Cordonnier stated, Brazil may end up importing as much as 800,000 MT to 900,000 MT of soybeans or more before the new crop becomes available sometime starting next January”. He added that without these imported soybeans, carryover “could be some ridiculously low number of under 500,000 MT, which would be the lowest since the government started keeping records” (Interesting note: an inventory of that size would only cover needs for a couple of days). Whatever soybeans Brazilian farmers still hold are selling for record high prices which will most likely encourage large soybean acres to be planted and possibly even switch some of the intended sugarcane and cotton acres over to soybeans. Any delays in the planting could make the situation even worse and recent updates indicate that only about 1% of Brazil’s soybeans have been planted so far and most of those are irrigated acres. If the weather continues to delay planting progress will also delay harvest, possibly pushing soy exports from Brazil until mid-February, 2021. In addition the dry weather could not only delay the planting but it could also impact yields. If this occurs the record small soybean carryover will also translate to less bushels available to be exported from the country and a likely delay in the planting of the Safrinha corn crop, potentially until after ideal planting dates. Lots of “what if’s” but it’s worth thinking about as you are deciding when to market your grain. We understand that every dollar matters more than ever these days and knowing your current breakeven numbers is key. Our patented MAX Program was designed to help take the unnecessary confusion out critical business decisions by providing current up-to-date numbers each month-not just at tax time. If you would like more information on how to take the “what if” out of your decision-making, please contact our office at 641-562-2370 we would be happy to visit with you.
According to World Weather Inc. southern Argentina received some much needed rainfall over the weekend but northern growing regions missed the precipitation and had temps as high as 110 degrees. Forecasts now show an increased chance of rainfall over the northeast portion of the country over next couple of weeks. Temps across Brazil were also quite high and dry conditions persisted except for a portion of Rio Grande do Sul where 0.15 to 1.10 inches of rain fell. Forecasts for the next 10 days show dry conditions continue across some portions of Brazil but far southern areas of Brazil have several opportunities for rain.
A last minute agreement was reached in Washington that will fund the government through December 11th. This funding includes $20 billion in borrowing authority for the Commodity Credit Corporation (CCC) which means the Farm Service Agency (FSA) can begin the process of making a series of “regular” farm-program related payments. The schedule of when payments are set to begin:
Transition Incentives Program TIP – October 2nd
Emergency Forestry CRP (EFCRP) – October 2nd
Some Conservation Reserve Program (CRP) – October 2nd
Agriculture Risk Coverage (ARC) – October 6th
Price Loss Coverage (PLC) – October 6th
Other CRP – October 9th
ARC Individual Option Contracts – October 26th
Payments for the CFAP 1 program totaled $10.2 billion as of September 27th. Payouts by state show Iowa topped the list at $969 million, followed by Nebraska $711 million, California $653 million, Texas $625 million, Minnesota $608 million and Wisconsin $523 million. The sign-up for the CFAP 2 is now underway and payments are expected to begin in the coming weeks.
The map below shows the expected rainfall total across the U.S. through Tuesday. Most precipitation is expected to be light and will likely not have much of an impact on harvest progress.
The outlook for October 6th through the 10th shows a return of warmer than normal temps across a large portion of the Corn Belt as well as the entire western U.S. while precipitation is expected to fall below normal over most of the country.
The last map below shows the expected U.S. precipitation compared to normal for the first half of October.