Grain News: June 28, 2018 – Wisconsin rated #1 in the country for corn
Yesterday’s good corn demand news and positive US/China trade talks just wasn’t enough for the markets to gain any momentum. Weighing also on the grains is the excellent growing conditions this year and the ratings. Wisconsin in case you missed it is rated #1 in the country for our corn! Later this morning the export report will be out and tomorrows USDA report is an important one.
US Ag Sec Perdue stated that he has been working on the reimbursement plan that President Trump promised the farmers if the trade war goes past harvest.
Yesterday’s morning weather report is the first real time that most forecasters are calling for drier than normal 6-10 and 11-15 day periods for the corn belt, and that dryness would now fall right in the start of the key corn development month of July. A true pattern change is a long way off but current outlooks are a far cry from the continually wet June forecasts that have been weighing down the grain trade and benefiting mostly ideal corn and soybean crops. On the demand side, China will start collecting a 25% tariff on U.S. soybeans starting July 6th, in response to U.S. tariffs on $200 billion of Chinese goods; however, the massive decline in U.S. export prices in the last month (gulf soybean export prices alone have fallen of $2.75 per bushel) takes care of most of that difference already, with the U.S. easily the bargain-basement supplier before any trade war consequences take effect.
The weekly ethanol production number released yesterday were much better than expected and looks like an additional 70-100 MBU of corn will land on the USDA demand ledger. Strong corn demand of late from end users will also help to cut into corn ending stocks number.
The funny thing about possibly tariff war is that there is always ways around them. Hearing chatter that China has already begun cancelling bean import tariffs from five Asian countries that are not on the US tariff list. This will allow China to re-buy beans from these countries and get around any US tariffs once the five countries buy beans from the US. It would be almost impossible for Washington to stop this from happening.
Tomorrow’s USDA Planted Acreage and grain stocks report will be out at 11:00. The markets are looking for any bullish news to turn around these prices. You should have your open offers in place and be ready to act if prices prove profitably for your operation. Your Landmark Grain Marketing Specialist are here to guide you through.