USDA Report Worksheet and NAFTA Negotiations - Wednesday, 11 October 2017

All season there has been debate regarding the size of the U.S. crop.  Right now the USDA has a corn yield estimate of 169.9 bushels per acre, which would actually be the 3rd highest average of all time.  Seems hard to believe but many reports, coming in from producers that have harvested some corn acres, indicate yields are surpassing many of their expectations. While this 2017 crop is not a record yield for many producers the consensus so far is that it may be in one of their top 5.

Soybeans have been estimated at 49.9 bushels per acre by the USDA. Reports have indicated that many traders don’t expect a significant adjustment higher in the overall yield but many believe the planted acres figure may increase anywhere from +250,000 to +750,000 acres based on data from the FSA.

U.S. Production

 

Oct. Est.

Avg. Trade Guess

Trade Range

USDA Sep.

Corn Production

???

14.204

14.060 - 14.355

14.184

Corn Yield

???

170.1

168.7 - 171.5

169.9

Corn
Harvested Acres

???

83.531

83.100 - 84.000

 

83.496

Soybean Production

???

4.447

4.335 - 4.490

4.431

Soybean Yield

???

50.0

49.1 - 52.1

49.9

Soybean Harvested Acres

???

89.017

88.500 - 89.820

88.731

U.S. Ending Stocks

 

Oct. Est.

Avg. Trade Guess

Trade Range

USDA Sep.

Corn

???

2.289

2.168 - 2.450

2.335

Soybeans

???

0.447

0.375 - 0.500

0.475

Wheat

???

0.946

0.928 - 0.971

0.933

World Ending Stocks 2017/18

 

Oct. Est.

Avg. Trade Guess

Trade Range

USDA Sep.

Corn

???

201.91

196.70 - 204.50

202.47

Soybeans

???

96.48

93.90 - 98.00

97.53

Wheat

???

262.80

258.00 - 265.40

263.14

 

Persistent rainfall across a large portion of the country has caused a delay in the fall harvest, with many states running considerably behind schedule.  The map below is a good illustration of the widespread nature of the set-back, especially for the nation’s corn harvest.

 

 

 

 

There is a lot of talk circulating about NAFTA right now as the discussions between negotiators from each country are meeting to reform the 23 year old agreement. According to Reuters, “The most powerful U.S. business lobby accused the Trump administration on Tuesday of making “poison pill proposals” to sabotage talks aimed at modernizing NAFTA, as negotiators began gathering in Washington for fresh trade talks.” In a recent interview with Forbes, President Trump stated “I happen to think that NAFTA will have to be terminated if we’re going to make it good”.  This is not a popular stance with many U.S. businesses and farmers that are lined up to support the current agreement. Emily Davis, a spokesperson for a U.S. Trade Representative told Bloomberg News in an email, “The president’s objectives with the NAFTA renegotiation are to create great jobs for Americans and reduce an unconscionable trade deficit. The president has been clear that NAFTA has been a disaster for many Americans, and achieving his objectives requires substantial change.”  She went on to say, “it’s natural that such changes will be opposed by entrenched Washington lobbyists and trade associations.”

All of the countries involved in the renegotiations are working to come to an agreement by the end of this year to avoid conflicts with the political calendar filling up with presidential elections in Mexico and U.S. Congressional mid-term elections. Dan DeMicco, a former steel exec that advised Trump during the election told Bloomberg News, “The president is not making an idle threat, if we can’t negotiate a deal to make trade more balanced, the only option is to walk away”.

 

Heatwaves and drought conditions this summer have led the European Commission to estimate the overall EU corn production at 59 MMT nearly 1 MMT less than a year ago and far behind the average of the last 5 years.  Due to this the Commission looks for near-record levels of imports nearing 15 MMT for 2017/18 according to a Reuters report.

Yesterday’s National League Division Series game between the Chicago Cubs and the Washington Nationals had to be postponed due to continuous heavy rain in Chicago.  During a 24 hour time frame from 8:00 a.m. Tuesday morning until 8:00 a.m. today the city received over 1.5 inches of rain and northern sections of the state saw more than 2.0 inches of rain. The map below shows the 24 hour rainfall totals for that area.


 

Weather Nation meteorologist Patrick Crawford warns that severe thunderstorms are likely over the weekend as a cold front moves through the Midwest.  The timing of this cold front is expected Friday night and early Saturday.  The main areas for severe weather at this time are northeast Kansas, southeast Nebraska, southern Iowa and northwest Missouri.  Increasing moisture out of the Gulf is expected to fuel the storms, sufficient energy and moisture will be available to increase the chances for these storms to become severe.  Severe threats will include: large hail, strong winds and isolated tornadoes.

 

The 6 to 10 day forecasts from NOAA, shown below, show a less than favorable outlook for harvest across the Midwest.  Generally warm temps with above normal rainfall is expected for much of the central portion of the country.

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