Farm Aid Package and Latest on Trade - Friday, 27 July 2018

Update for July 27th, 2018

President Trump has authorized a $12 billion Farm Aid package intended to relieve the financial stress caused from declining agricultural commodity prices caused by trade and tariff issues. To help compensate producer’s U.S. Secretary of Agriculture, Sonny Perdue announced that the USDA is prepared to take action in the form of 3 different programs each designed to assist farmers until the trade tariff negotiations can be worked through. The 3 different parts to the program are as follows:

  •  The Commodity Credit Corporation (CCC) Charter Act is expected to be administrated by Farm Service Agency (FSA) and will deliver scheduled payments to the producers of soybeans, sorghum, corn and wheat.
  • The USDA will also use the CCC Charter Act as well as additional authorities to execute a Food Purchase and Distribution Program through the Agricultural Marketing service.  The purpose of this is to purchase any surpluses of products such as beef, pork, milk, rice, legumes, nuts and fruits for distribution to food banks and various other nutrition programs.
  • The Trade Protection Program is part of the CCC’s Charter Act and will be used for the purpose of helping the U.S. develop new export markets around the world for our farm products.  This portion of the assistance program will be administrated through the Foreign Agriculture Service (FAS).

Some traders assume that China will need to return to U.S. soybeans in September when exports from Brazil run out. Fortunately though in the meantime U.S. soybeans have been gaining the attention of a wide variety of other buyers this summer helping with our export levels. In other trade related news, a surprisingly quick and fresh beginning in U.S. trade relations appears to be in the works between the U.S. and E.U. This week President Trump met with the president of the European Commission, Jean-Claude Juncker yesterday and the two announced that the European Union and the U.S. have agreed to hold off on further tariffs and will work to eliminate most tariffs between the two trading partners including steel and aluminum. At a news conference held in the White House Rose Garden President Trump stated, “We’re starting the negotiation right now, but we know very much where it’s going.” Mr. Juncker followed up by saying, “I had the intention to make a deal today.”

Bloomberg reports that Mexico is working tirelessly to reach a deal with the U.S. and Canada on NAFTA and is pushing for a deal by the end of August.  An agreement before December 1st would allow the newly elected President of Mexico, Andres Manuel Lopez Obrador to focus on domestic priorities when he takes office. 

High level NAFTA negotiations are planned for this week following a two month break from discussions for Mexico’s presidential elections.  Since progress with talks have thus far been unpredictable President Trump recently suggested a bilateral deal may be on the table with both Mexico and Canada separately but so far the Mexican administration does not support this they are expressing a preference to preserve a three nation free trade agreement.

U.S. corn exports remain very strong at the current time due in part to domestic issues in Brazil, Argentina and in the Ukraine. High soybean prices and complications with receiving necessary corn inputs have many producers in Brazil considering the possibility of planting fewer corn acres this upcoming season. This is promising for U.S. prices but the larger problem may form in the long-term corn outlook if trade negotiations continue into next year’s U.S. planting season. This would likely push producers to switch soybean acres to corn acres and potentially flood the corn market with record bushels during the 2019/20 harvest.

The weekly Crop Progress Report rated the nation’s corn crop this week at 72% Good to Excellent and 9% Poor to Very Poor.  States listed below showed some change in the corn rating for this week:

  • North Dakota and Pennsylvania both saw +3% improvements in the GD/EX rating from a week ago.
  • Illinois, Missouri and South Dakota all had their rating GD/EX ratings go up by +2%.
  • Iowa, Minnesota, Nebraska, Tennessee and Wisconsin increased GD/EX ratings by +1%.
  • Colorado GD/EX fell by -14%
  • North Carolina declined by -10% GD/EX
  • Ohio saw a -9% decrease in GD/EX
  • Michigan fell by -6%
  • Kentucky and Texas both saw -1% declines in GD/EX

U.S. soybeans continue to find record demand from several global buyers possibly due to the significant price discount for our soybeans compared to those out of South America. Kevin Van Trump of the Van Trump Report commented this week, “Chinese importers have to be painfully monitoring prices and just shaking their heads.  Perhaps they have some deals in place that allow or help them import our U.S. soybeans through other nations.” In the long run it all comes down to demand and exporting as many bushels as possible to help keep our inventories manageable and prices supported.

The weekly Crop Progress Report rated the U.S. soybean crop this week as 70% GD/EX and 8% Poor to Very Poor.  78% of the soybeans are blooming which is ahead of 67% a year ago and the 5 year average of 63%.  44% of the counties soybeans are setting pods compared to 26% last year and the 5 year average of only 23%.  Right now every state is showing soybean development running ahead of the normal pace. States with changes in soybean crop conditions this week:

  • Missouri +8% GD/EX
  • Arkansas, Illinois and Louisiana all saw +5% GD/EX
  • Nebraska, North and South Dakota and Tennessee improved by +2% GD/EX
  • Iowa, Kentucky and Minnesota saw a +1% improvement in the GD/EX category

The NOAA 6-10 day outlook for July 28th-August 1st shows a large majority of the central U.S. will see temps remain below normal while much of the remainder of the country will see above average temps.  Rainfall totals are expected to reach anywhere from 2-6 inches or more in the mid and southern Atlantic states. 1 to 3 inch totals are forecast for the eastern Corn Belt into the Northeast. 

 

 

 

 

CROP PROGRESS

 

Corn Silking - Selected States

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

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                 :            Week ending            :          

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

      State      : July 22,  : July 15,  : July 22,  : 2013-2017

                 :   2017    :   2018    :   2018    :  Average 

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                 :                    percent                   

                 :                                              

Colorado ........:    19          17          55          28    

Illinois ........:    80          93          97          80    

Indiana .........:    63          74          86          66    

Iowa ............:    69          68          88          61    

Kansas ..........:    70          64          83          71    

Kentucky ........:    85          77          86          75    

Michigan ........:    37          26          46          43    

Minnesota .......:    55          45          77          50    

Missouri ........:    90          91          95          83    

Nebraska ........:    72          65          82          68    

North Carolina ..:    96          90          94          95    

North Dakota ....:    26          33          63          27    

Ohio ............:    56          63          79          56    

Pennsylvania ....:    42          28          52          52    

South Dakota ....:    41          48          76          47    

Tennessee .......:    95          91          95          91    

Texas ...........:    73          76          85          83    

Wisconsin .......:    30          30          53          35    

                 :                                              

18 States .......:    63          63          81          62    

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Corn Dough - Selected States

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

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

                :               Week ending               :            

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

      State     :  July 22,   :  July 15,   :  July 22,   :  2013-2017 

                :    2017     :    2018     :    2018     :   Average  

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

                :                        percent                       

                :                                                      

Colorado .......:      -              -            1             -     

Illinois .......:      6              7           33            14     

Indiana ........:      4           (NA)            6             4     

Iowa ...........:      3           (NA)            7             5     

Kansas .........:      8             17           34            14     

Kentucky .......:     29             16           32            19     

Michigan .......:      1           (NA)            1             -     

Minnesota ......:      -           (NA)            3             1     

Missouri .......:     26             10           51            23     

Nebraska .......:      8              4           22             7     

North Carolina .:     69             46           63            67     

North Dakota ...:      -           (NA)            -             -     

Ohio ...........:      2           (NA)            5             2     

Pennsylvania ...:      -           (NA)            2             3     

South Dakota ...:      1              1           10             2     

Tennessee ......:     52             41           64            45     

Texas ..........:     57             56           65            60     

Wisconsin ......:      -           (NA)            -             -     

                :                                                      

18 States ......:      8           (NA)           18             8     

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

-    Represents zero.                                                   

(NA) Not available.                                                    

 

Corn Condition - Selected States: Week Ending July 22, 2018

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

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

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

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

                :                          percent                         

                :                                                          

Colorado .......:     5          14          25          44          12    

Illinois .......:     2           3          13          49          33    

Indiana ........:     2           6          20          53          19    

Iowa ...........:     2           4          15          54          25    

Kansas .........:     7          14          29          43           7    

Kentucky .......:     -           2          15          68          15    

Michigan .......:     7          15          29          40           9    

Minnesota ......:     2           4          16          52          26    

Missouri .......:     7          14          44          29           6    

Nebraska .......:     1           2          10          60          27    

North Carolina .:    14          26          34          23           3    

North Dakota ...:     -           1           8          69          22    

Ohio ...........:     1           4          23          49          23    

Pennsylvania ...:     1           5          25          58          11    

South Dakota ...:     2           4          23          52          19    

Tennessee ......:     1           4          11          50          34    

Texas ..........:    12          20          36          30           2    

Wisconsin ......:     1           4          12          49          34    

                :                                                           

18 States ......:     3           6          19          50          22    

                :                                                          

Previous week ..:     3           6          19          51          21    

Previous year ..:     4           8          26          49          13    

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-  Represents zero.                                                        

 

Soybeans Blooming - Selected States

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

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

                :               Week ending               :            

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

      State     :  July 22,   :  July 15,   :  July 22,   :  2013-2017 

                :    2017     :    2018     :    2018     :   Average  

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

                :                        percent                       

                :                                                      

Arkansas .......:     90            89            93            76     

Illinois .......:     74            79            88            67     

Indiana ........:     65            70            80            65     

Iowa ...........:     70            65            81            66     

Kansas .........:     59            59            74            47     

Kentucky .......:     48            39            52            41     

Louisiana ......:     94            96            98            90     

Michigan .......:     64            46            61            62     

Minnesota ......:     67            56            74            66     

Mississippi ....:     89            88            91            81     

Missouri .......:     54            56            69            42     

Nebraska .......:     77            65            78            71     

North Carolina .:     44            38            49            39     

North Dakota ...:     61            67            86            67     

Ohio ...........:     58            66            78            59     

South Dakota ...:     60            53            68            66     

Tennessee ......:     70            58            72            54     

Wisconsin ......:     56            49            66            56     

                :                                                      

18 States ......:     67            65            78            63     

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

 

Soybeans Setting Pods - Selected States

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

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

                :               Week ending               :            

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

      State     :  July 22,   :  July 15,   :  July 22,   :  2013-2017 

                :    2017     :    2018     :    2018     :   Average  

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

                :                        percent                       

                :                                                      

Arkansas .......:     71            63            78            51     

Illinois .......:     31            44            66            24     

Indiana ........:     26            37            53            27     

Iowa ...........:     27            21            40            24     

Kansas .........:     14            13            30            11     

Kentucky .......:     26            17            30            18     

Louisiana ......:     86            82            88            76     

Michigan .......:     27             9            21            20     

Minnesota ......:     19            15            35            19     

Mississippi ....:     74            63            77            53     

Missouri .......:     22            19            32            12     

Nebraska .......:     24            16            40            23     

North Carolina .:     24            11            21            19     

North Dakota ...:     16            19            44            21     

Ohio ...........:     19            23            41            15     

South Dakota ...:     18             9            29            19     

Tennessee ......:     35            25            38            26     

Wisconsin ......:     20            13            26            18     

                :                                                      

18 States ......:     27            26            44            23     

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

 

Soybean Condition - Selected States: Week Ending July 22, 2018

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

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

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

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

                :                          percent                         

                :                                                          

Arkansas .......:     3           8          25          50          14    

Illinois .......:     2           4          16          51          27    

Indiana ........:     2           7          23          52          16    

Iowa ...........:     2           4          18          56          20    

Kansas .........:     4          14          36          40           6    

Kentucky .......:     1           2          16          68          13    

Louisiana ......:     1          11          28          46          14    

Michigan .......:     5          15          29          45           6    

Minnesota ......:     1           4          19          54          22    

Mississippi ....:     -           4          25          53          18    

Missouri .......:     4          13          35          41           7    

Nebraska .......:     1           2          12          62          23    

North Carolina .:     8          13          35          41           3    

North Dakota ...:     -           2          14          70          14    

Ohio ...........:     1           5          26          49          19    

South Dakota ...:     2           6          27          51          14    

Tennessee ......:     -           1          15          58          26    

Wisconsin ......:     1           4          14          52          29    

                :                                                           

18 States ......:     2           6          22          52          18    

                :                                                          

Previous week ..:     2           6          23          53          16    

Previous year ..:     4          10          29          47          10    

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-  Represents zero.           &nb

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