Tariffs, Crop Progress and Weather Outlooks - Wednesday, 20 June 2018

Update for June 20th, 2018

Right now U.S. exports face their largest uncertainty from new Chinese tariffs.  The very first item specified on the Chinese list of U.S. exports to face these new tariffs is soybeans which are then followed by, corn, milo wheat, and fresh and frozen beef. The list of goods is over 100 items long and is hitting rural America first and hard. At current price levels the U.S. holds an advantage over other soybean exporters into China.  The month of August shows a 20 cent advantage and September has a 40 advantage.  Hopefully this will help the U.S. secure late summer soybean sales.

The Trump administration is working to negotiation better trade deals with key importers of U.S. products.  The hope is that this will secure export demand and improve access to the global market for U.S. farmers for the long term.  The Iowa Farm Bureau Spokesman reported that Gregg Doud, chief agricultural negotiator for U.S. Trade Representative (USTR) recently visited Iowa and held a round table discussion with Iowa governor Kim Reynolds, Iowa Agriculture Secretary Mike Naig and representatives of Ag groups from across the state.  Doud, who grew up on a farm in Kansas, told the group that he understands and appreciates that farmers are nervous, “but we want to get this right for the long term”. Doud explained that the problems they are working to repair are complex, entrenched and will take time to fix.

Some of the specific issues with China are over intellectual property and the high tech industry.  Doud explained that this is why the Trump administration has targeted the high tech sector with tariffs.  The group is also working to end China’s trade distorting practices in agriculture policy such as subsidizing their farmers and the stockpiling of large amounts of commodities that ultimately depress world prices. Doud said, “We have got to have discipline to keep working to push China to change its Ag policy, if we have any long-term hope of bettering our ag prices here in the United States.  I understand the nervousness and sensitivity around China but I want you to understand that we have to look at this from 3, 5 or 10 years down the line.  If we don’t get more discipline in what’s going on in Chinese agriculture, the cancer is going to spread.”

In regards to NAFTA Doud told the group that the biggest issue holding up negotiation is disagreements regarding the auto industry.  President Trump has said that he will take as long as necessary to get it right, “there is no panic about NAFTA, but everyone is in the trenches trying to get it worked out”.

Doud also said that U.S. Trade Representatives are working on bilateral trade agreements with other key importers as well, especially Japan.  He said, “That is a critical market for agriculture, and we need to get to work to get an agreement done”.  The trade group is also beginning negotiations with Vietnam, the Philippines and nations in Africa.  Once the Brexit process is completed Doud also sees the United Kingdom as another key export prospect to explore.

Crops in the U.S. continue to rate higher than normal for this time of year. This week’s Crop Progress Report showed that the nation’s corn is now rated 78% GD/EX up 1% from a week ago.  The soybean rating fell 1% this week to 73% GD/EX.  Another important rating to consider and one that is gaining more interest is the Poor to Very Poor category which is showing that only 4% of the corn and 5% of the U.S. soybeans. A few of the other issues to watch:

  • Mexico is considering tariffs on U.S. corn.
  • Soy crush set a record in May.
  • Acreage numbers expected to increase by the end of the month.
  • Black Sea region is seeing crop losses take place.
  • Weather is mostly favorable for crops in the U.S.
  • Funds are short 53,000 corn and 43,000 soybean contracts.

 

 

The USDA and NASA are working together to track soil moisture from data gathered from the first NASA satellite dedicated to measuring the water content of soils.  The purpose of this partnership is to assist the USDA in the monitoring of global croplands and to help make better commodity forecasts.  Prior to this new technology the USDA relied on computer models that analyzed precipitation and temperature observations to indirectly calculate soil moisture.  Now with SMAP global coverage is available every 3 days, SMAP can then send the data to the Crop Explorer tool with much more updated and accurate readings.  The data from SMAP also contains information received from the European Space Agency which is helping to make more precise forecasts available.

The current 5-day forecast which runs from June 20th-25th is shown in the map below.  The outlook calls for broad coverage of rainfall in amounts of 1 to 2.5 inches across most of the Corn Belt and into parts of the central and southern Plains.

 

The 6 to 10 day outlook from the National Weather Service shown in the maps that follow show wetter and warmer than average temps will persist through the end of June.

 

 

CROP PROGRESS REPORT

Corn Emerged - Selected States

[These 18 States planted 92% of the 2017 corn acreage]

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                 :            Week ending            :          

                 :-----------------------------------:          

      State      : June 17,  : June 10,  : June 17,  : 2013-2017

                 :   2017    :   2018    :   2018    :  Average 

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                 :                    percent                   

                 :                                              

Colorado ........:     95          93          97          95   

Illinois ........:     99          95         100          99   

Indiana .........:     91          97          99          96   

Iowa ............:     98          97          99          97   

Kansas ..........:     94          96          99          96   

Kentucky ........:     95          92          96          96   

Michigan ........:     92          77          87          96   

Minnesota .......:    100          97          99          96   

Missouri ........:    100         100         100          96    

Nebraska ........:    100          97         100          99   

North Carolina ..:    100          98         100         100   

North Dakota ....:     97          89          96          93   

Ohio ............:     95          89          96          96   

Pennsylvania ....:     88          71          83          92   

South Dakota ....:    100          95          98          97   

Tennessee .......:     98          97          99          98   

Texas ...........:     98          95          96          97   

Wisconsin .......:     93          87          96          91   

                 :                                              

18 States .......:     97          94          98          97   

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Corn Condition - Selected States: Week Ending June 17, 2018

[These 18 States planted 92% of the 2017 corn acreage]

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      State     : Very poor :   Poor    :   Fair    :   Good    : Excellent

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                :                          percent                         

                :                                                           

Colorado .......:     -           3          16          70          11    

Illinois .......:     1           3          15          52          29    

Indiana ........:     1           4          19          56          20    

Iowa ...........:     1           2          13          60          24    

Kansas .........:     1           5          33          52           9    

Kentucky .......:     1           1          12          69          17    

Michigan .......:     1           4          26          51          18    

Minnesota ......:     -           1          11          63          25    

Missouri .......:     2          13          37          41           7    

Nebraska .......:     -           1          13          75          11    

North Carolina .:     4          13          30          46           7    

North Dakota ...:     -           2          17          73           8    

Ohio ...........:     -           2          11          60          27    

Pennsylvania ...:     -           6          29          55          10    

South Dakota ...:     -           2          32          56          10    

Tennessee ......:     1           2          20          57          20    

Texas ..........:    11          12          38          38           1    

Wisconsin ......:     -           1           9          60          30    

                :                                                          

18 States ......:     1           3          18          59          19    

                :                                                          

Previous week ..:     1           3          19          59          18    

Previous year ..:     2           6          25          55          12    

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-  Represents zero.                                                        

 

Soybeans Planted - Selected States

[These 18 States planted 96% of the 2017 soybean acreage]

-----------------------------------------------------------------

                 :            Week ending            :          

                 :-----------------------------------:          

      State      : June 17,  : June 10,  : June 17,  : 2013-2017

                 :   2017    :   2018    :   2018    :  Average 

-----------------------------------------------------------------

                 :                    percent                   

                 :                                               

Arkansas ........:     94         96           98         87    

Illinois ........:     96         96          100         93    

Indiana .........:     95         96           98         94    

Iowa ............:     99         98           99         94    

Kansas ..........:     89         89           94         81    

Kentucky ........:     85         76           86         75    

Louisiana .......:     99         99          100         97    

Michigan ........:     95         77           86         98    

Minnesota .......:    100         98           99         96    

Mississippi .....:     97         96           98         95    

Missouri ........:     91         90           94         77    

Nebraska ........:     99         97          100         98    

North Carolina ..:     79         68           79         72    

North Dakota ....:    100         97          100         96    

Ohio ............:     95         90           95         95    

South Dakota ....:    100         96           99         97    

Tennessee .......:     84         79           87         76    

Wisconsin .......:     95         92           96         92    

                 :                                              

18 States .......:     95         93           97         91    

-----------------------------------------------------------------

 

Soybeans Emerged - Selected States

[These 18 States planted 96% of the 2017 soybean acreage]

-----------------------------------------------------------------

                 :            Week ending            :          

                 :-----------------------------------:          

      State      : June 17,  : June 10,  : June 17,  : 2013-2017

                 :   2017    :   2018    :   2018    :  Average 

-----------------------------------------------------------------

                 :                    percent                   

                 :                                              

Arkansas ........:    89          90          94          80    

Illinois ........:    90          90          93          84    

Indiana .........:    82          88          94          84    

Iowa ............:    91          89          97          85    

Kansas ..........:    75          75          84          63    

Kentucky ........:    67          59          71          58    

Louisiana .......:    97          97          99          93    

Michigan ........:    83          63          77          88    

Minnesota .......:    96          87          96          88    

Mississippi .....:    94          91          94          91    

Missouri ........:    79          81          87          64    

Nebraska ........:    95          93          97          91    

North Carolina ..:    66          54          66          61    

North Dakota ....:    93          75          88          82    

Ohio ............:    83          79          88          85    

South Dakota ....:    96          79          91          86     

Tennessee .......:    68          60          71          58    

Wisconsin .......:    81          73          88          80    

                 :                                              

18 States .......:    87          83          90          81    

-----------------------------------------------------------------

 

Soybean Condition - Selected States: Week Ending June 17, 2018

[These 18 States planted 96% of the 2017 soybean acreage]

----------------------------------------------------------------------------

      State     : Very poor :   Poor    :   Fair    :   Good    : Excellent

----------------------------------------------------------------------------

                :                          percent                         

                :                                                          

Arkansas .......:     1           8          24          51          16    

Illinois .......:     1           3          19          54          23    

Indiana ........:     2           5          19          57          17    

Iowa ...........:     1           2          17          59          21    

Kansas .........:     1           5          38          51           5    

Kentucky .......:     1           1          12          72          14    

Louisiana ......:     2           6          38          43          11    

Michigan .......:     1           4          27          53          15    

Minnesota ......:     -           1          16          59          24    

Mississippi ....:     -           2          23          60          15    

Missouri .......:     5          14          37          39           5    

Nebraska .......:     -           2          16          74           8    

North Carolina .:     1           4          39          52           4    

North Dakota ...:     -           3          15          76           6    

Ohio ...........:     -           2          17          60          21    

South Dakota ...:     -           4          35          54           7    

Tennessee ......:     -           2          22          64          12    

Wisconsin ......:     -           2          11          60          27    

                :                                                           

18 States ......:     1           4          22          58          15    

                :                                                          

Previous week ..:     1           3          22          60          14    

Previous year ..:     2           5          26          57          10    

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-  Represents zero.                                                         

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