1) the article refers to "President Trump's trade wars" This is inaccurate. You can point to "President Trump's tariffs" but the trade wars have been going on since at least 2001 with China's accession to the World Trade Organization and the problem of China's mercantilist, protectionist, technology transfer and IP thieving behavior should have been confronted over the last 18 years.
2) Failure to note that the ongoing deaths of hundreds of millions of Chinese hogs is failure to address one of the largest factors in the demand side of the equation.
2019 will go down as one of the most complex ag futures trading seasons ever. From the early spring cool and wet conditions that delayed or in many cases completely prevented planting, to the aforementioned demand destruction to the substitution effects at the individual farm level: farmers saw soybeans weren't selling and tried to plant corn instead/corn acres that were still flooded in May were planted in soybeans because beans take less time to maturity; on a more macro substitution level, wheat got rocked on the last WASDE report because expectations that part of the wheat crop would be used as animal feed were dashed with the much larger than expected corn crop estimate.
And a couple other factors I'm omitting because I was just offered a doughnut and have to go chase it down.
From Bloomberg:
American farmers already stung by President Donald Trump’s trade wars now face billions of dollars in potential losses as controversial data from the U.S. government snuffs out a rally in corn.The Agriculture Department on Monday said farmers planted a bigger corn area than analysts estimated and pegged crop yields that also exceeded expectations, sparking the biggest rout in futures since 2013. That was a blow to growers who were holding back supplies, hoping a rally that started in May due to delayed sowing would extend through the fall.The decline represents a potential loss of almost $3.5 billion for U.S. farmers, according to the American Farm Bureau, and is another setback for them after prices fell following the USDA’s previous acreage report, which was widely criticized for containing outdated data.The latest data is compounding the pain from the trade war between Washington and Beijing, which has significantly reduced purchases from the world’s largest soybean buyer. Policy uncertainty has also hit the farm economy as a new U.S. deal with Mexico and Canada is yet to be passed. What’s more, the government is allowing 31 oil refineries to go without blending ethanol into fossil fuels, hurting demand for corn.“This is a huge disappointment for farmers that have already been struggling with a lot of uncertainty with this corn crop, trade wars and what have you,” said Tanner Ehmke, manager of the research team at CoBank, a $138 billion lender to the agriculture industry. “A lot of people were banking on the opportunity to sell at much higher prices. This report now really brings that into question.”Crashing corn prices are an additional stress for growers facing huge farm debt, which the USDA estimates will rise 3.9% this year to $427 billion. Last year, farm debt-to-income was at the highest level since 1984.Farm IncomeWhile farm income remained weak in the second quarter in the tenth district, the pace of declines had slowed partly as the slowest corn plantings on record boosted prices, according to the Federal Reserve Bank of Kansas City.The USDA pegged planted corn acres at 2.6% higher than expected while yields came in 2.8% above. Growers who were already disappointed by the price declines after the last acreage report had hoped the agency’s rare re-survey of plantings would deliver a number that better reflects one of the wettest planting seasons on record. Soybean acres were below forecasts, though yields were higher....MUCH MORE
The extent of the decline in corn prices, limit down on Monday after the report and then down big again on Tuesday were monstrous but they were only the waterfall at the end of the rapids, down from the $4.60 double top in June and again in July:
