USDA Report Data and Discussion Begins On New 2018 Farm Bill - Friday, 10 March 2017

The data released by the USDA this week was a bit more negative than what had been anticipated for both corn and soybeans.  Much of the bearish news came as a result of better than anticipated production out of South America. 

Corn

  • Corn used for feed and residual usage was lowered by -50 million bushels
  • Ethanol was increased by +50 million bushels
  • The corn crop in Argentina was raised from 36.5 MMT to 37.5 MMT’s.
  • Brazil’s corn crop was increased substantially from 86.5 MMT to 91.5MMT’s
  • The global ending stocks also were increased by over +2 million tons.
  • The estimated range for corn prices for producers was left unchanged at $3.20 to $3.60 per bushel.

Soybeans

  • Ending stocks for soybeans were raised by +15 million bushels from 420 to 435 million bushels.
  • U.S. exports were lowered by -25 million bushels
  • Domestic crush was raised by +10 million bushels
  • The soybean crop in Argentina was left unchanged
  • Brazil’s soybean production was increased from a record 104 MMT’s to 108 MMT’s.
  • Global supplies were raised by +3.2 million tons to 646.9 million tons
  • The estimated range for soybean prices for producers was raised slightly.  The current estimate ranges from $9.30 to $9.90 per bushel.

U.S. Ending Stocks 2016/17

 

March Est.

Avg. Trade Guess

Trade Range

USDA Feb.

USDA
2015/16

Corn

2.320

2.317

2.245 - 2.385

2.320

1.737

Soybeans

0.435

0.418

0.444 - 0.444

0.420

0.197

Wheat

1.129

1.135

1.050 - 1.164

1.139

0.976

World Ending Stocks 2016/17

 

March Est.

Avg. Trade Guess

Trade Range

USDA Feb.

USDA
2015/16

Corn

220.68

218.51

217.0 - 223.1

217.56

210.4

Soybeans

82.82

81.52

80.44 - 83.0

80.38

77.2

Wheat

249.94

248.62

246.00 - 250.00

248.6

240.8

South American Production

 

March Est.

Avg. Trade Guess

Trade Range

USDA Feb.

USDA
2015/16

Brazil Corn

91.50

87.78

86.00 - 91.50

86.50

67.0

Brazil Soybeans

108.0

105.95

104.00 - 109.00

104.00

96.5

Argentina
Corn

37.5

36.46

35.0 - 37.0

36.50

29.0

Argentina
Soybeans

55.50

55.20

54.0 - 56.0

55.50

56.8

Hearings are currently underway for the new 2018 Farm Bill.  Chairman of the Senate Agriculture Committee, Pat Roberts, was in Kansas last week for the first field hearing regarding the new Farm Bill.  Senator Roberts has helped compose 7 farm bills during his tenure and recognizes the enormous importance this new bill will likely have.  Prior to the start of the hearing he told constituents, “We are…trying to prevent what could be a farm crisis on our hands.”  The last farm bill was written in 2014 when commodity prices were quite high and now they are at a 60-year low.  At the first meeting of the House Agriculture Committee several leaders in the ag industry testified that, “farm finances look to dip in 2017 for the 4th consecutive year.” One of experts to testify was Joe Outlaw, an economist for the Agricultural and Food Policy Center at Texas A & M.  He pointed out in his comments that since the last farm bill was enacted farm income has fallen by        -$23.7 billion and farm program payments have only amounted to $13.2 billion. “Thus in no way are commodity payments making the farmer whole,” he said. (DTN)

According to The Des Moines Register, rumors have been circulating of a “backroom deal” in Washington D.C. that would hurt the renewable fuels industry.  The report said that the President was going to sign an executive order moving the burden of blending ethanol and biodiesel into the nation’s fuel supply to the fuel retailers and away from the oil refiners. Opponents to this change believed that this would hurt farmers and consumers by hampering the widespread usage of these products. Iowa Governor, Terry Branstad, looked into this report and has been reassured by President Donald Trump’s administration that they intend to support producers of ethanol and biodiesel. Eric Branstad, Gov. Branstad’s son, who works within the presidential administration also assured the Governor, “this is not going to happen.” Gov. Branstad also pointed out that, “It would be much more difficult to enforce the renewable fuels standard if you had to deal with all the retailers in the nation, rather than the people who are distributing the fuel,” which adds to the fact that this really never made any sense from the start.

There has been a reported outbreak of the Bird Flu in a flock of 84,000 turkeys in Wisconsin. This is the seconded reported outbreak within the U.S. in a week.  According to the World Organization for Animal Health, the newly reported strain of the avian flu is less virulent than the H7 virus found in a flock of chickens in Tennessee a week ago.  Typically the low pathogenic viruses, like the one in Wisconsin, cause few or no clinical signs in birds which is prompting more countries like South Korea, Japan and Taiwan to ban some imports of U.S. poultry. (Reuters)

There are three separate weather systems bringing snow to blanket the Northern Plains, Midwest and East through the middle of next week.  The first system is expected to hit areas of the Midwest as it dives south bringing snow and ice as far south as Tennessee and North Carolina. A much “sharper plunge” arrives next week, snow totals have not been determined yet for this second system.  The largest system that is expected to hit the East Coast week could become a record setting snow maker for this late in the season.

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