WASDE Update and Weekend Heat - Jun, 15 June 2018
Update for June 15th, 2018 The June WASDE report from the USDA was released on Tuesday.  Some of the important numbers to consider: Estimated U.S. corn yield was left unchanged at 174.0 bushels per acres. Exports for old-crop corn supplies were increased by +75 million bushels. New crop corn used for ethanol was raised by +50 million bushels which off-sets the -50 million bushel loss in food, seed and industrial purposes. New crop corn used for Feed and Residual was reduced by -25 million bushels. Ending stocks for new crop corn was lowered by -105 million bushels from 1.682 to 1.577 billion bushels. Ending stocks for old crop corn was reduced by -80 million bushels from 2.182 to 2.102 billion bushels. Argentine corn production was left at 33 MMT Brazil corn production was also lowered from 87 MMT to 85 MMT. Corn production from Russia is reduced based on government data showing less acres planted than previously expected. U.S. soybean yield was left unchanged at 48 bushels per acres. Old crop soybeans used for crush was increased by +25 million bushels, new crop used for crush were also raised by +5 million bushels to 2.0 billion. Soybean exports were left unchanged. Soybean ending stocks for new crop was reduced by -30 million bushels from 415 to 385 million bushels. Old crop supplies were lowered by -25 million bushels from 530 down to 503 million bushels. Argentine soybean production was lowered from 39 to 37 MMT. Brazil soybean production was increased again from 117 to 119 MMT. This also raises estimated soybean exports for the country for both 2017/18 and 2018/19 marketing years. The average U.S. farm price was left unchanged within a range of $8.75 to $11.25 per bushel. ... view details

Pre-Report Worksheet and Market Headlines - Jun, 11 June 2018
The USDA is set to announce the June WASDE report tomorrow at 11:00 a.m. CT.  Traders expect to see a decrease in old and new U.S. crop carryout, especially in corn.  Once the data is released the trade will be quick to turn attention back to current production. Below is a worksheet showing what the trade is estimating and how that compares to the May numbers. ... view details

Prices and Weather Outlooks - Jun, 07 June 2018
Update for June 7th, 2018   Corn and soybean prices have been in a tailspin thanks to several factors, one of them being weather. The months of June and July are generally when traders become more focused on weather headlines and concerns.  The delayed planting in several key growing areas this spring gave producers a bit of an early “weather market” but now that the crop is planted without many further issues we have lost some of the risk-premium the market had built into prices. There are so many contradicting forecasts outlooks for the month of June it’s really impossible to guess what to expect over the next few weeks.  Some weather models have shown hot and dry for the Corn Belt in June but as we know the weather changes quickly and right now traders see some cooler and wetter outlook models and strong crop condition ratings and they are not ready to push prices higher. Trade negotiations have whip-sawed the market a few times now.  Talks with China were originally going well and then abruptly ended with few explanations and then a couple of weeks ago they reported a deal was close and now it appears we are back to square one. NAFTA also seems to be in limbo and in addition now the U.S. is dealing with retaliations from Mexico, Canada and the E.U. enacting tariffs on several U.S. goods and products. All of the trade issues also raise questions regarding the USDA’s export estimates and the export sales data and what this all could indicate in regards to overall demand and where that could be headed as a result. Obviously the two W’s… Washington and Weather are very hard to predict so continue to pay attention to further developments. Some of the other headlines in the news: ... view details

Hot Forecast and Crop Conditions - May, 31 May 2018
Update for May 31st, 2018 Several negative factors have caused the grain markets to slide lower the past couple of days.  The most notable of these being the on again-off again trade situation with China and now with the NAFTA negotiations as well.  Traders were undoubtedly impressed by the condition of the U.S. corn crop which was included in this week’s USDA crop progress report for the first time this season.  The report showed that 79% of the U.S. corn crop is rated good to excellent which is 7% above trade expectations and 8% above the 5 year average.  In comparison to previous years this week’s corn condition rating is the highest recorded for this date since 1994 when 79% was rated good to excellent making this the best in 24 years. (The Planting Progress report is shown at bottom of newsletter).  Lack of any threatening weather outlooks also adds to the weakness in the market although there are some concerns regarding the drought affecting the Southwestern U.S.  According to recent reports, 2/3rds of this affected region is suffering from some degree of drought conditions.  Of this 40% has been classified as extreme drought which affects not only crops but livestock as well. As we look into extended outlooks for June the forecast for the 2nd week of June indicates this already parched region can expect temps into the triple digits.  This will only add to the dryness concerns facing the southern Plains.  ... view details

Planting Progress, China Trade Truce and Weather Forecasts - May, 25 May 2018
Update for May 25th, 2018 The USDA reported this week that 81% of the U.S. corn crop has been planted which is right on the mark with the 5 year average.  States that are furthest behind their normal pace are: Pennsylvania -29% South Dakota -15% Michigan -13% Wisconsin -10% Minnesota -7% North Dakota -5% Colorado -4% Iowa -2% States that are running furthest ahead of normal: Indiana +17% Illinois and Missouri are both +9% Ohio +5% ... view details

Trade Talks Continue and Weather Outlooks - May, 18 May 2018
Update for May 18th, 2018   Continuing trade negotiations, planting progress and summer weather outlooks are the driving force behind the current trading range we’ve been seeing.  The loss of around -20 MMT of production out of South America appears to already be figured into current trade range. The biggest “unknown” are the regions within the heart of the Corn Belt that remain to wet to plant as well as parts of southern Illinois, southern Indiana, parts of Missouri and several areas across the Delta where drought persists.  There have been conflicting reports regarding the trade negotiations.  Earlier in the week there seemed to be some progress being made in talks with the Chinese and now there are reports that China is prepared to reduce the trade deficit with the U.S. by $200 billion by 2020.  At this early stage there are no details and no agreements have been signed but the fact that the Chinese have made an offer is very positive. There has been some concern that NAFTA negotiations seem to have stalled but Canadian Prime Minister Justin Trudeau told Reuters today that he feels positive about the talks and a top Mexican official believes a deal could be made by the end of May. Canadian officials are in Washington furthering talks, Trudeau told the Economic Club of New York, “To be honest, we are down to a point where there is a good deal on the table. Its right down to the last conversations…I’m feeling positive about this, but it won’t be done until it’s done.” Some of the important factors in the markets: ... view details

USDA Report Update & Forecast Outlook - May, 10 May 2018
Update for May 10th, 2018 The USDA reported Monday that the planting progress in the U.S. is mostly normal.  Corn planting is running less than a week behind the normal pace and soybean planting is actually ahead of normal. ... view details

Planting Progress and Weather - May, 05 May 2018
Update for May 4th, 2018   Risk premium due to fewer U.S. acres and weather delays along with strong demand continue to add value to U.S. grains.  Argentina has seen significant corn production issues, to begin with the country saw hot temps with very dry conditions and now significant flooding.  Brazil is also experiencing weather issues in key growing regions which is also raising concerns in the market. On the other side of the issue though we are reminded of the large supply on-hand here in the U.S., higher than expected Russian exports, NAFTA uncertainty and the ongoing trade negotiations with China. The USDA weekly crop progress report on Monday showed that the U.S. corn crop is 17% planted vs 32% a year ago, the 5 year average is 27% by this date and 3% emerged.  Soybeans are 5% planted which is right on with the 5 year average but 4% behind last year’s pace of 9%.                                       ... view details

USDA Crop Report and Improved Planting Outlook - Apr, 25 April 2018
Update for April 25th, 2018 The USDA weekly crop report shows that very little planting advancement took place over the past week.  Producers are falling further behind each day and stress levels are surely increasing.  The chart below shows where progress stands as of Monday compared to a week ago as well as the 5 year average.   Temperatures have rebounded this week across the Midwest with forecasted highs hitting the 60-70 degree range.  The central and northern portions of the Plains are expecting slightly colder temps with parts of South Dakota and Nebraska only looking for high temps in the low 40’s.  The map below shows the 4 inch soil temperature readings from Tuesday morning across the country. ... view details

Latest Weather Outlooks and NAFTA Update - Apr, 20 April 2018
The exceptionally cold spring has producers and analysts wondering what to expect as we move into May.  Meteorologists predict that this cold spell should end before May 1st but there is rising concern that damage to yields may already be done by that point.  Chip Flory of Pro Farmers and host of Agri-Talk “After the Bell” interviewed Mike Tannura of T-Storm Weather regarding his research that shows a strong association between significantly cold temps in April and below trend-line yield results.  He told Flory that, “Based on data we’re looking at today, there’s a chance it could be the coldest of the entire period going back to 1895.” He explained that if you take corn performance data from the 20 coldest years since 1895 and compare it with corn performance since 1960 you will find a link between cold April temps and smaller yields. He uses the year 1960 because hybrid technology was so different prior to then and 7 of the coldest 20 have occurred since that year.  Out of those 7 years, six of them produced below trend line yields. He also pointed out that while the weather in April is typically not a major contributor to final production but a cold April that leads to later planting of the corn crop is. The extremely cold temps in April have some wondering if this is an indication to expect more weather extremes during the growing season. Some recent outlooks are telling us we could have an extremely hot period in either June or July. This is an important scenario when you consider a lower USDA corn acreage of 88 million acres, a possible jump in preventive plant acres and the prospect of the late planting pushing pollination into a period of extreme heat.  All things to be aware of and watch for as we move forward. ... view details

USDA Worksheet, Status on Trade Deals and Weather Outlook - Apr, 13 April 2018
While somewhat surprising, the markets are focusing little attention on the trade war instead prices seem to be more interested in U.S. spring planting delays, the declining condition of winter and spring wheat and smaller than expected South American corn production.  The USDA announced the April Supply and Demand report on Tuesday which delivered some surprises.  U.S. soybean ending stocks were lowered by 5 million bushels from a month ago to 550 million bushels.  This blew away estimates from the trade which showed an expected 19 million increase in stocks.  Global soybean supplies were reported at 90.80 million tons vs 94.40 a month ago and trade estimates of 92.95 million tons.  This reduction is partially due to further cuts to Argentine production which dropped another 7 million tons from last month. U.S. corn ending stocks grew by 55 million bushels from a month ago but was slightly less than the trade was looking for.  Global corn stocks fell by 1.39 million tons to 197.78.  Yield reductions to both Argentina corn, down 3 million ton and Brazil corn, down 2.5 million tons was the main reason the global corn supply was lowered. ... view details

New Chinese Tariff's and A Cold/Wet April Outlook - Apr, 04 April 2018
China’s Ministry of Commerce announced today plans to impose a 25% tariff on U.S. soybeans and several additional agricultural produce including corn, wheat, cotton sorghum, tobacco and beef in addition it’s expected that ethanol will see a 15% tariff.  This comes as retaliation against U.S. proposed duties on high-tech goods from China.  The actual date that these tariffs will be implemented depends on the outcome of negotiations being held between our two countries. Last Thursday the USDA surprised the market with lower than expected acreage estimates for both corn and soybeans. Corn acres were estimated at 88.026 million vs the trade estimate of 89.42, this is a 2% decline from 2017. Soybean acres were estimated at 88.982 vs the trade estimate of 91.06, this is a 1% decline from 2017.  This reduces total corn and soybean acres by 3.301 million acres compared to last year.  Wheat acres came in higher than expected at 47.399 million compared to 46.0 with spring wheat leading the way with 12.627 million acres vs the expected 11.5 million acres, for spring wheat that is a 15% increase from a year ago when looking at the total for wheat as a whole there is a 3% increase from last year.  Other crops pulling significant acres away from corn and soybeans besides wheat are cotton, up 7% from last year, sorghum, rice and oats. The map below shows the reduction of corn and soybean acres is widespread across the Plains and Corn Belt. ... view details

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