March 1st, 2018 - Thursday, 01 March 2018

Update for March 1st, 2018

Uncertainty in South America and strong demand here at home have helped fuel commodity prices.  Many private analysts have lowered their production estimates for Argentine corn this season and now the USDA also trimmed their estimate from 42 MMT down to 39 MMT. Recently some sources have lowered their forecasted estimates even further to sub 35 MMT. There are conflicting reports in regards to the planting of the safrinha crop in Brazil. Some believe that the number of acres that actually get planted will be much less than what had been predicted but AgRural reports that 43% of the safrinha crop is planted compared to 57% a year ago and the 5 year average of 47%.  There are now reports out of Washington that the meeting between President Trump and several senators and cabinet members to discuss the RFS mandate ended without an agreement but further conversations are planned, this meeting, uncertain trade negotiations and weather in South America all put added attention on the USDA March 8th report out next week.



Crops in Argentina have been suffering through a drought of historic proportions.  AgriCensus is reporting that 56% of the countries soybean crop and 57.6% of the corn crop are rated poor to very poor according to the Buenos Aires Grain Exchange. It’s important though to keep in mind that while it’s easy to become very bullish during a weather market rally, the smaller crop expected out of South America is already compensated for with the record large soybean stocks from last year. According to the February WASDE report those stocks totaled 98.14 million tons compare that to the years from 2014 to 2016 we saw little price improvement and we had 75 million tons on hand. The markets are largely moving due to the spec funds and its unlikely users will pick up the slack once the funds stop buying.

The story on corn may be slightly different than it is for soybeans.  The graph below shows a much tighter supply than it shows for soybeans.  If the South America corn crop gets reduced further the larger impact on prices should be seen in the corn market.

Reuters reports that Brazil could surpass the U.S. and become the world’s largest exporter of corn within the next 5 years.  Brazil has spent billions of dollars to improve and update their shipping ports to make shipping of goods cheaper and much more reliable which has increased buying from other countries like China.  Brazil is already the top global exporter of soybeans, beef and sugar, now corn exports are expected to rise by 1 million tonnes from a year ago while the U.S. is forecast to lose 6.2 million tonnes of corn exports valued at nearly $1 billion dollars.

Treasury Secretary Steven Mnuchin told Politico last week that he was “cautiously hopeful” that the U.S. Trade Representative Robert Lighthizer is working to renegotiate NAFTA and not towards a withdrawal from the agreement. Mnuchin also mentioned that the Trump administration is actively strategizing other trade negotiations. 

The U.S. Department of Energy has released findings from two studies on the next generation of more-efficient high-compression engines.  The studies found that gasoline blended with ethanol was one of the few promising fuel blends for these engines.  This is a very positive finding for ethanol producers across the nation.

Forecast maps for March 1st – 5th show below above normal temperatures are expected across the eastern half of the U.S. while the remainder of the country will stay below normal and precipitation will cover a large portion of the countries midsection.

Heavy rain has saturated a large area of the country last week from Texas to the lower Mississippi Valley, Ohio River Valley and southern Great Lakes which has brought over 200 river gauges to flood stage and beyond. More rain is predicted this week for many of these areas with up to 5 more inches expected which will add to the serious flooding situation.


The year 2018 has been named the “Year of the Tractor” by Smithsonian.  Currently a green, yellow and red 1918 Waterloo Boy tractor welcomes visitors entering the “American Enterprise” exhibit at the Smithsonian’s National Museum of American History.  The display marks John Deere’s 100th anniversary of entering the tractor market.  The exhibit highlights the past, present and future in agriculture and illustrates the major impact light weight tractors have made on agriculture that ultimately brought the family farm into commercial production.

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