And one of the reasons we stopped talking about soybeans as a trade and started talking about African Swine Fever in China and the disaster in U.S. farm country.
Two from AgWeb. First up, Friday May 10:
Corn Prices to Hit Near-Record Lows, Time to Trim Soybean Acres
Today’s World Agricultural Supply and Demand Estimates (WASDE) report from USDA sent shockwaves through the market. With corn prices seeping lower, traders and farmers alike are reeling from the numbers.
“New crop corn carryout was way over the highest expectation,” said Chip Nellinger, Blue Reef Agri-Marketing, to U.S. Farm Report Host Tyne Morgan. “The 176 bu. per acre yield—I’m betting the under on that.”
The 2019-20 corn crop is projected to reach 15.0 billion bu., up from last year and the second largest on record. Total corn supplies are forecasted at 17.2 billion bu. with the season-average farm price at $3.30 per bu. This is down 20 cents and the lowest since 2006-07 marketing year.
“The one thing that I think the market is missing is they’re assuming with this five, six-day weather window that we’re just going to slam a lot of seed in the ground,” Nellinger said. “And that’s not the case.”
After polling its Midwest customers this past week, even farmers in the driest areas need until Tuesday or Wednesday of next week to finish up planting corn, he added. Some of those farmers expected it could take up to Friday—when it’s going to start raining again.
“We’re not going to get nearly as much planted this coming week as what the market expects,” Nellinger said. “Don’t panic into a sale at or near the lows that you know, with one Tweet, you can regret.”
Speaking of Tweets, President Trump enacted $325 billion additional tariffs on Chinese goods at 12:01 a.m. Friday, May 10. The ongoing trade war has wreaked havoc on farm country—namely soybean prices.
We need to cut 10 million-plus soybean acres to get back to higher prices, said Arlan Suderman, with INTL FCStone. “And that’s likely not going to happen.”...MOREAnd Monday May 13:
Traders Turn Focus to Crop Progress Report & Weather Maps
Good Morning from Allendale, Inc. with the early morning commentary for May 13, 2019.Here's the May 10, 2019 WASDE
Grain market traders have become increasingly discouraged over the U.S.-China trade negotiations, though the prospects of a deal supported Chicago futures in recent months. However, traders appear to have been on the right track as they have been building pessimism. Can slow planting progress and a possible aid program be enough to turn traders’ views around and send prices higher in the near future?
Last week, July corn futures were down 20.5 cents, July Soybean futures down 34.25 cents, while July wheat was down 13.5 cents. July Soyoil ended down 56 points and soymeal down $11.50.
China’s Vice Premier Liu He said after the meetings last week, in order for them to reach an agreement the U.S. must remove all extra tariffs, set targets for Chinese purchases of goods in line with real demand and ensure that the text of the deal is “balanced” to ensure the “dignity” of both nations. Vice Premier Liu said both sides agreed to keep talking and to hold upcoming meetings in Beijing. China sees the removal of all the extra tariffs that have been imposed since last year as a precondition to a deal, whereas U.S. negotiators see retention of some duties as a key mechanism to enforce a deal.
In a joint statement, the U.S. National Association of Wheat Growers (NAWG), the American Soybean Association (ASA) and the National Corn Growers Association (NCGA) said farmers across the United States "are extremely concerned by the actions taken today" by the U.S. government. "U.S. wheat growers are facing tough times right now, and these additional tariffs will continue to put a strain on our export markets and threaten many decades worth of market development." (Xinhua News Agency)
U.S. Ag. Secretary Sonny Perdue tweeted on Friday that the president directed the agency to “work on a farmer relief plan quickly”. "While China may backtrack, @POTUS is steadfast in his support for U.S. farmers and directed @USDA to work on a plan quickly," Perdue said on Twitter.
President Trump tweeted on Sunday that the U.S. is "right where we want to be with China," adding that China "broke the deal with us" and then sought to renegotiate. "We will be taking in Tens of Billions of Dollars in Tariffs from China. Buyers of product can make it themselves in the USA (ideal), or buy it from non-Tariffed countries,". Trump added: "We will then spend (match or better) the money that China may no longer be spending with our Great Patriot Farmers (Agriculture), which is a small percentage of total Tariffs received, and distribute the food to starving people in nations around the world!" However, any funds from U.S. tariffs go directly into the U.S. Treasury's general fund, and Congress (not the White House) directs how the U.S. spends these proceeds.
Weekly Crop Progress report will be released today at 3 p.m. CST. Trade estimates corn planting at 35-36% complete (23% last week, 62% last year and 5-year average of 69%). Soybean planting expected at 14-15% (6% last week, 35% last year and 5-year average of 26%). Hard red Spring wheat planting at 34-36% complete (22% last week, 58% last year and 70% 5-average)....MORE
