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Grain News – Too Early to Predict China Outcome

U.S. Trade Representative Lighthizer told Congress, it is too early to predict an outcome in China. The main issue with China is to stop non-economic transfer of U.S. technology. Currency issues seem more positive. He also claims that significant progress has been made with China but changes have not been resolved just by additional purchases from U.S. goods. Lighthizer stated if Congress fails to ratify USMCA (NFTA) would be catastrophe. Congress does not have to ratify the US-China deal. U.S. Trade Representative’s office formally stated they are suspension of tariff increases until further notice.

U.S. ethanol production rose to 302 million gallons ending last week. Ethanol margins improved slightly, but still in the red. Ethanol production is still off the pace needed to reach USDA’s corn for ethanol demand estimates. South Korea bought two cargos of corn. Corn is still 30 cents more out of U.S. vs South America. The Association of American Railroads said the U.S. loaded 12,700 railcars are up 1% from one-year ago.

March 8th is the next USDA supply demand report, there are indications of change to the balance sheet for corn. The report will focus on exports and corn for ethanol use. The planting intentions report is due out at the end of March along with quarterly stocks.

Funds continue to add to their short position in corn, beans and wheat. As we are getting closer to planting season, make sure to have your offers in place. Let us help you reach goals for 2019 going forward. Spring of 2020, corn on the board starts with a four and is roughly 30 cents higher than this spring.

Posted in Blog, Grain

Grain News – Trump Encourages EU to “play ball” in Trade Talks

Friday’s Twitter announcement from Washington of China’s good faith agreement to buy 10 mln tonnes of U.S. soybeans allowed for some optimism but by the end of the day Monday the red ink on the wheat screen was too hard to ignore as funds sold commodities before First Notice day on Thursday.  Funds have increased their corn and wheat short position while also moving to the short side of beans.  If the 10 mmt of soybeans is old crop that would be sizeable as China Year to date has purchased only 7.41 mmt vs last year at 26.2 mmt.

Trade negotiations continue in Washington even though most of the Chinese delegation has returned to Beijing and a final deal may not occur until Trump/Xi meet and there is no date announced.  President Trump today warned the European Union he would “tariff the hell out of you” if Brussels does not “play ball” in trade talks and told a group of governors that the negotiations with the EU might be even tougher than those with China.

Monthly US winter wheat ratings were lower than expected with all states but KS seeing a drop from last month.  Snow is in the forecast for the northern corn belt and accumulations are ranging from a half to four inches.  Winter weather continues to hamper logistics allowing for nearby bids in some cash markets to reflect quick ship premiums and making freight expensive.

Posted in Blog, Grain

Grain News – Markets Sparking Upward Movement

As February is winding down the markets seem to be trying to spark some upward movement. Currently corn, soybeans and wheat are all trading higher. The market is getting ready for a series of news the next two days that can clarify price movements for the 2019 crop.

Negotiations are continuing between the U.S. and China. Leaked news this morning claims that they are working on a Memorandum of Understanding that China would buy $30 billion per year more of U.S. ag products than pre-trade levels. In 2017 they bought $24 billion so it would increase to a total of $54 billion to be spent on ag commodities specifically stating corn, DDGS, soybean and wheat.

USDA is expected to release information on the ag economy and give an updated forecast for 2019 acreage at its outlook conference. They will also release more supply and demand estimates on Friday. Friday’s expected dump of data should get the export sales data caught up from the government shut down.

Corn is seeing support today based on the comments made about the talks with China. Corn appears to be too cheap to attract more acres which should increase chances of a rally. Weather currently isn’t a factor right now but may be in the coming weeks.

Soybeans are showing some gains this morning on hopes of an end to the trade war. Market is continuing to watch South America expected yields. Continue to keep an eye on any upswings in the soybean market and start making some new crop sales.

Wheat has had a tough week and no real fresh news to get the market motivated higher. U.S. wheat continues to be priced too high to spur new interest for export sales.

Now is a good time to look at your marketing plan for remaining old crop and new crop bushels. We are ready to help you incorporate different contracts to help maximize your average for crop sales. Take a look at our average price contract for some of your new crop bushels. Deadline to sign up is March 15th. Averaging period runs March 18th through July 12th. Your grain marketing specialists are ready to be your partner in your grain marketing journey.

Judy Uhlenhake

Posted in Blog, Grain

Grain News – Disappointing Export Sales

Happy Valentine’s Day!  Two days of trade talks between the US and China begin today.  According to a Bloomberg article, President Trump is considering a 60-day extension of the March 1st deadline for higher tariffs on Chinese imports. President Trump and President Xi are expected to meet sometime in March to discuss a potential trade agreement.

Export sales for the week ending Jan 3rd were released this morning. They were disappointing all around with soybeans having a net cancellation by China for that week. By next week Thursday the plan is for the USDA to catch up on the export sales reports and get back to normal reporting after that. To start out today the markets have reacted lower to the negative sales number. Currently US corn prices are 11-25 cents higher than South American corn in the World marketplace.

Many areas of South America still have weather concerns of either too dry in parts of Brazil and too wet in parts of Argentina. As crops there are being harvested, we will continue to get more reports of yields and more supply becomes available for export.

The average trade estimate for today’s January soy crush report is for 169.57 million bushels of soybeans crushed.  This would be the highest monthly crush number for January on record.  As new crush plants come on line in the US, we should continue to see record soybean crush numbers. At least we have one positive demand story in soybeans to talk about.

The February averages for revenue-based insurance products are $4.01 ½ for corn and $9.57 ¾ for soybeans.

The grain markets will be closed next Monday for President’s Day. The deadline to sign up for the Market Facilitation Payment at the FSA office is today. Landmark will be hosting grain marketing meetings next week Tuesday and Wednesday. At these meetings our marketing specialists will be setting appointments to create individualized marketing plans for your operation. The last few years it has been very important to start marketing early and this year looks to be shaping up the same way. Let us know if we can help in any way. Please call to RSVP to one of these meetings today.

Happy Valentine’s Day!

Doug Cropp

 

 

Posted in Blog, Grain

Grain News – USDA Releases First Major Report

jim photoIt’s another beautiful day in the neighborhood! Just keep thinking that spring is only five weeks from now and we’ll be climbing into the tractors to plant hopefully four weeks after that. Last Friday the USDA released the first major report in two months, the reaction from traders were well let’s just say muted! All the numbers were pretty much in line or averaged out through the balance sheet.

CORN
USDA says 2018 U.S. corn production reached 14.420 billion bushels, with average yields of 176.4 bushels per acre. That number comes in 206 million bushels lower than the agency’s prior estimates. U.S. 2018/19 ending stocks dropped 46 million bushels to 1.735 billion bushels.

BEANS
USDA pegged the 2018 U.S. crop at 4.544 billion bushels on average yields of 51.6 bpa, which is a bit lower than its prior projection of 4.600 billion bushels. Analysts expected the agency to report a smaller drop to 4.572 billion bushels, including a Farm Futures estimate of 4.505 billion bushels. Soybean ending stocks for 2018/19 moved slightly lower, from prior estimates of 955 million bushels up to 910 million bushels.

WHEAT
USDA released estimates for 2018/19 U.S. winter wheat seedings this morning, which total 31.290 million acres, down from prior estimates of 32.595 million acres. Analysts had expected a modest drop in acres this coming season, with an average guess of 32.128 million acres. U.S. wheat ending stocks for 2018/19 are on the rise, moving from prior estimates of 974 million bushels up to 1.010 billion bushels. Analysts predicted a more modest increase to 989 million bushels.

Next week will kick off our Grain Marketing Meetings, if you haven’t RSVP yet, please give us a call. This is one of Landmarks more popular meetings and space is limited. Come and have lunch and or dinner on us and hear Kevin Riesburg from RJO give his grain outlook forecast for the year.

Be safe,

Jim Fleming

 

 

 

 

 

Posted in Blog, Grain

Grain News – Nervous Market on the Big Bean Supply

It is the day of the long-awaited report of final production numbers, wheat seeding and supply and demand for February.  The market has been up and down.  Get your offers in ahead of the report.

Corn is stuck in the 3.78 March 2019 and 4.02 Dec 2019.  The US sold 20 million bushels of corn in the week ending 12/27, down from 67 million in the week ending 12/20. Top buyers during the holiday week were Mexico, Columbia & Peru.   The report is expected to provide some much-needed fundamental direction for corn.

The market is nervous about how big the bean supply.  Look for movement treading down.  China is on their Luna New Year.  Trump is stating highly unlikely the meeting with Chinese President Xi Jinping before March 2 deadline.  Senators urged Lighthizer and President Trump to not terminate NAFTA until the new agreement (USMCA) is analyzed and passed by Congress.

Another negative economic data point from Germany and a lowering of their GDP growth forecast by the European Commission has pushed EU and US stock markets lower this morning.  The dollar index is higher while the Euro has fallen from $1.1525 to $1.1325.

Make sure to have your offers in on old and new crop bean and corn.  We never know what the USDA is going to say and how the market will react to the news.

Be safe out there.

Melisa

Posted in Blog, Grain