Harvest Progress, NAFTA and Weather Outlooks - Wednesday, 18 October 2017

Harvest progress is running behind average especially in several of the top producing states.  This is true for both corn and soybean crops but is particularly noticeable when comparing corn progress to previous years.  Here are just a few:

CORN

  • Minnesota 3-7% harvested vs 5 year average of 38%
  • Iowa 5-13% harvested vs 5 year average of 41%
  • South Dakota 6-12% harvested vs 5 year average of 39%
  • Nebraska 4-17% harvested vs 5 year average of 39%
  • Illinois 9-47% harvested vs 5 year average of 64%
  • Indiana 10-34% harvested vs 5 year average of 46%
  • Ohio 8-21% harvested vs 5 year average of 32%
  • North Dakota 4-8% harvested vs 5 year average of 29%

SOYBEANS

  • Minnesota 23-45% harvested vs 5 year average of 82%
  • Iowa 6-32% harvested vs 5 year average of 66%
  • South Dakota 26-48% harvested vs 5 year average of 78%
  • Nebraska 10-33% harvested vs 5 year average of 59%
  • North Dakota 28-72% harvested vs 5 year average of 78%

Ag policy is an important issue for everyone involved in any aspect of the business of Agriculture.  Matt Roberts, a nationally recognized expert and speaker on grain and energy markets as well as an agricultural economist at The Kernmantle Group. He explained to a group of 500 growers at a corn strategies event that, “farm bills are referendums of success or failure of the previous farm bill, as judged by the ag community, filtered through the lens of what is politically popular and possible”. He also told producers to not expect any big changes, “The reality is we have less power on the ag committee than we have had in decades.  Only 11 of 45 members from the House and 6 of 21 members from the Senate are from Midwest ag states.  All of this matters because people outside the Midwest have different priorities in farm bills” That’s where the SNAP or Supplemental Nutrition Assistance Program comes into the picture.  Roberts explained, “SNAP is a political compromise to get the bill passed.  There is simply not enough political support for farm legislation to exist on its own.  By combining nutrition assistance, legislators from non-farm districts and states can still find issues to support in the legisltation.”  Roberts expects that the 2018 Farm Bill will simply be an update to the 2014 bill that he predicts won’t actually be completed in 2018.  “There will be at least 1 extension.  We haven’t passed a farm bill on time in 20 years.”

Chinese officials have stated that they believe China’s demand for soybean imports will continue to grow.  Imports to the country totaled 93.5 MMT last year and the long-range forecasts expect this to increase to 95 MMT this year and by 2022 they see demand reaching 110 MMT. Reuters reports that subsidies to farmers in China’s top corn providence will be reduced by 13% this year. The government is attempting to reduce their stockpiles of corn and encourage more farmers to plant other crops like soy.  It’s estimated that the country has around 180 MMT of old crop corn in warehouses that were stored during a previous stockpiling program.

 

 

Eric Martin and Josh Wingrove of Bloomberg News wrote an article Monday, October 16, 2017 regarding the progress of negotiation for NAFTA now during this 4th round of meetings.  The U.S. chief negotiator John Melle has presented the most hardline demands to date, some of these proposals are seen as politically unfeasible for Mexico and Canada to consider.  Many from Congress and the private sector have expressed deep concern that these proposals may jeopardize a trade deal that has successfully broken down trade barriers for 20 years for both agriculture and manufacturing. 

The next round of talks is scheduled during the first week of November in Mexico City.  All sides had hoped to reach an agreement by December but officials have indicated that these negotiations are likely to last several more months.  If President Trump were to ask for the U.S. to leave NAFTA, as he has threatened to do several times, it would first need to be approved by Congress where he would certainly face stiff opposition.  Richard Neal, a congressman from Massachusetts that sits on the House Ways and Means committee said that he prefers a NAFTA renewal versus pulling out of the agreement which he said Congress would likely block.

Negotiators for Mexico said that they are optimistic a deal can be made because they anticipate “pushback from the U.S. private sector”. 

 

The 5 day precipitation map shown below indicates there will be some solid progress made in harvest over the coming days.  The maps from NOAA that follow take us further into the month and show temp and precipitation patterns expected from October 24th-the 30th.

 

 

     

 

WeatherTrends 360 is predicting a repeat of temperature patterns found in 2014.  In mid-October 2014 the U.S. was experiencing a rather warm October, at that same time a Super Typhoon Nuri (category 5) was in the West Pacific and then turned into the Siberian Sea off of Alaska’s coast.  Within a couple of weeks cold Arctic air made its way into the U.S. which plummeted temps and put November, 2014 in the record books as being the coldest in 14 years.  WeatherTrends 360 sees similarities with Typhoon Lan currently in the West Pacific which is expected to become a category 4 and possibly a cat 5 Super Typhoon.  This system is following a path much like that of Typhoon Nuri in 2014.  Fall typhoons typically displace the jet stream and allow periods of cold air to enter in the the Central and Eastern U.S. Both the Euro and GFS are also showing a ridge with a big trough building in the Western U.S. for late October into November that will bring warm temps to the area west of the ridge and much colder air to regions on the eastern side of the trough.

© 2015 Ag Performance | All Rights Reserved.

Home | About Us | Services | Products | News | Contact Us |