Cuts to the federal crop insurance program were blocked in the recent budget agreement, but the battle isn’t over.
New cuts are now being proposed in Washington.
According to Cornerstone Ag Services agent, Jennifer Otteson, some lawmakers may not appreciate the importance of crop insurance. It’s essential.
To get an operating loan, most of the time, farmers have to have crop insurance. It’s part of your risk protection.
Without it, in one year, it could wipe out your whole operation. Otteson, who is based at Buxton, North Dakota, said these cuts jeopardize the entire crop insurance program.
It’s not just attacking reimbursement to the insurance companies or to the agents; they’re looking at cutting subsidies to the farmers.
Corn closed the week 14.75 cents lower.
Last week, private exporters reported sales of 116,000 metric tons of grain sorghum to an unknown destination.
Weekly export sales showed corn sales were 24.3 million bushels for corn.
Annual sales are 542 mb or 30 percent slower than last year’s pace.
In the weekly crop progress and conditions report, the USDA reported U.S. corn harvest is now at 93 percent complete and in line with trade estimates.
Due to the excellent harvest weather this fall, this is above the 78 percent done last year at this time and the five-year average of 88 percent complete.
In the monthly supply/demand report, USDA raised yields and ending stocks for corn.
The USDA pegged U.S. carryout at 1.760 billion bushels, well above the pre-report estimate of 1.597 bb.
Yields were increased to 169.3 bpa, the second largest in history trailing only last year, while exports were thought to decline by 50 mb to 1.8 bb.
Also, ethanol usage was cut by 75 mb.
All these changes, resulted in the USDA increasing ending stocks to 1.76 bb, up from 1.561 bb last month and very similar to last year’s 1.731 bb at this time.
Last year, corn rallied into the end of the year.
Informa estimated 2016 U.S. planting intentions for U.S. corn at 90.1 million acres; down 700,000 acres from their previous estimate.
Smaller acres in 2016 will mandate a near-perfect growing season to keep ending stocks from shrinking to extremely tight levels.
Strategy and outlook: Producers should use a rally into the end of the year to make additional sales or wait until a weather scare in
the summer months.
Soybeans closed the week 11.25 cents lower.
Last week, private exporters announced sales of 300,000 mt of soybeans to China and 136,000 mt of soybeans to an unknown destination.
Weekly export sales of new crop soybeans were 47.7 mb.
The export pace of the 2015/16 marketing year now stands at 1.07 bb, or down 20 percent mb from last year’s pace.
The weekly crop progress report saw U.S. soybean harvest came in at 95 percent complete versus 89 percent last year and the above the five-year average of 93 percent complete.
In the monthly supply/demand report, the USDA forecast U.S. soybean ending stocks were raised to 465 mb, a 40 mb increase from October and easily the largest stocks figure of the last eight years.
Compare this to the stocks of 191 mb last year. To increase the stocks, U.S. yields were raised 1.1 bushels per acre to 48.3 bpa, resulting in a record production of 3.981 bb.
The USDA raised crush 10 mb and raised its export estimate 40 mb.
The stocks figure is overwhelmingly bearish.
In Argentina, Mauricio Macri is leading the polls in Argentina, and if elected a devaluation of the peso will likely free up additional soybean exports and expand row crop acreage in
2016. This would also be bearish to soybeans.
Informa estimated soybean acreage in the U.S. for 2016 at 85.3 million acres; up 1.4 million from their previous estimates.
Strategy and outlook: Producers should use a rally into the end of the year to make additional sales or wait until a weather scare in the summer months.
Do not store unprotected soybeans.
This material has been prepared by a sales or trading employee or agent of Midwest Market Solutions and is not a solicitation. Brian Hoops can be reached at (605) 660-1155.
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