USDA February Report and US Dollar Falls - Tuesday, 09 February 2016

The USDA released the February report this morning and the worksheet below shows the range of estimates as well as the actual February numbers.

USDA Supply and Demand Tuesday, February 9, 2016 Worksheets

U.S. Ending Stocks in billions of bushels

 

Feb. #

Previous USDA

Avg. Guess

Range of Guesses

Corn

1.837

1.802

1.809

1.752 - 1.852

Soybeans

.450

0.440

0.445

0.425 - 0.470

Wheat

.966

0.941

0.947

0.931 - 0.975

World Ending Stocks

 

Feb. #

Previous USDA

Avg. Guess

Range of Guesses

Corn

208.8

208.94

208.25

203.50 - 210.00

Soybeans

80.4

79.28

78.97

76.36 - 81.00

Wheat

238.9

232.04

231.48

229.66 - 233.00

South American Production in millions of tonnes

 

Feb. #

Previous USDA

Avg. Guess

Range of Guesses

Brazil
Corn

84

81.50

81.51

80.50 - 82.00

Brazil Soybeans

100.00

100.00

99.43

98.00 - 101.00

Argentina
Corn

27

25.60

25.34

24.50 - 27.00

Argentina Soybeans

58.5

57.00

56.91

56

 

For several months now we have been told that the high value of the U.S. Dollar is partly to blame for falling commodity prices.  Last week the Dollar saw a massive break in value but it has amounted to ZERO gain in corn prices.  It’s quite disappointing that the last time the Dollar was at this level was in October when corn was +$.20 cents higher and soybeans were +$.50 cents higher and yet our market did not respond when the value of the Dollar fell.  Rising production estimates out of South American along with falling U.S. exports, lower crude oil prices and increasing supplies of ethanol are all bearish factors weighing down prices.   

 

 

The fate of the federal crop insurance program will again face opposition this year according to Roger Bernard, a policy analyst with Informa Economics.  “Be aware: Crop insurance will be in the cross hairs again, it’s the low-hanging fruit that seems to be the place most anti-subsidy folks are focusing their attention.”  He encourages producers to pay very close attention to Obama’s 2017 budget proposal which is expected to be released today.  Informa was notified that Obama’s budget contains a proposal to cut crop insurance.  Last fall there was a bipartisan budget deal that would have cut $3 billion from the crop insurance program but after much protest the money was brought back through the highway bill in December. Bernard reminds us, “be aware, agriculture, because crop insurance is still going to be the focus for budget cutters.”

The maps below show the forecast for February 9 – 13th.   Below normal temps are expected across the eastern half of the country while the Pacific Coast to the High Plains look for warmer than normal temps.  The majority of the country is forecasted to receive below normal precipitation except small portions of the Upper Great Lakes region and the far Northwest.

 

The El Niño weather pattern is producing record low snowfall for the state of Alaska.  While it is typical behavior for an El Niño weather pattern to bring below normal snowfall and above normal temperatures to this region, this specific system is setting records.  December and January set records for the least amount of snowfall in some areas and Fairbanks, Alaska has broken the record for least snowfall from Dec 1 – Jan. 31st, since they began keeping records in 1915.             

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