The latest Farm Futures survey of 2017 planting intentions shows a massive acreage shift in the works for this spring as growers try to figure out how to make a profit in another challenging year.
Results of the survey of 1,060 producers from 40 states were released on the first day of Farm Futures annual Business Summit in Bettendorf.
Growers said they want to plant 90.52 million acres of soybeans this spring, easily a record, and 8.5 percent more than in 2016. If achieved, soybeans would attract more acres than corn for the first time since the PIK year of 1983, when growers idled ground in a government program.
Farmers said they plan to plant 90.49 million acres of corn, down 3.7 percent from 2016. The cutback in corn would be accompanied by reductions in sorghum and spring-planted wheat.
Farmers said they would slash sorghum acreage 15.8 percent to 5.63 million, cutting 5.1 percent off spring wheat and durum to 11 million and 2.3 million, respectively.
Total plantings reported in the survey would be down around 580,000 acres, though some of that would wind up in other crops.
Most of the reductions planned by farmers would wind up in soybeans, which gained 7.1 million acres, with cotton gaining another 1.4 million. Corn would lose 3.5 million, with all wheat down 4.5 million and sorghum down 1.1 million.
U.S. Grains Counsel chief executive officer Tom Sleight remains concerned about the trade friction between the U.S. and China.
Sleight said China is looking to restrict imports so it can use its own domestic supply. With the increase of duties on U.S. DDGs going into China, increase in tariffs of U.S. ethanol going into China and the continued slow progress on biotech approvals and we’re having some grave concerns here on where we are headed.
USDA is asking the federal courts to dismiss a lawsuit dealing with the Pork Checkoff’s former advertising slogan. In 2012, the Humane Society of the United States and others filed the lawsuit claiming the sale of “The Other White Meat” slogan from the National Pork Producers Council to the National Pork Board was done improperly.
A district court dismissed the case, but it was reinstated in 2015. In the latest motion, USDA attorneys argue the case is not reviewable because it deals with issues that go beyond the agency’s authority.
Perdue as Sec/Ag
Former Georgia governor Sonny Perdue was selected at U.S. ag secretary. Perdue was the first Republican governor of Georgia since Reconstruction.
Perdue will need to get to grips with the 2018 farm bill. Rural America’s new-found political influence will help shape the legislation, according to Chuck Conner, president and chief executive officer of the National Council of Farmer Cooperatives, and a Trump adviser.
Purdue is known for promoting pro-business policies, while working to streamline government to improve its efficiency. He founded Perdue Partners LLC, an Atlanta-based trading company.
“He’s a talented politician. He seems capable,” said former Agriculture Secretary Dan Glickman.
Corn closed the week 1.25 cents higher.
Last week, private exporters announced sales of 339,656 metric tons to an unknown destination.
Weekly export sales of corn showed a total of 54.3 million bushels (1.379 million mt) with 53.8 mb (1.367 mmt) for the 2016- 2017 marketing year.
This was well above the 23.3 mb (591,100 mt) needed this week to be on pace with USDA’s January demand projection of 2.225 billion bushels.
Corn found a bid last week from strong export sales and a strong week of private export sales.
Out of the last seven private sale announcements, six have been for corn.
Weekly ethanol data was also supportive. Ethanol production hit another all-time record at 1.05 million bushels per day. Production has been above 1 million bpd for 12 straight weeks.
Corn is showing a potential bullish breakout on the weekly charts after closing at the highest levels since the middle of July. Reduced acres this spring and strong demand trends leaves traders wanting to buy breaks in the market.
Strategy and outlook: A rally into weekly resistance was a great time to sell inventory, look to re-own on weekly support.
Soybeans closed the week 23.5 cents higher.
Last week, private exporters did not report any private sales.
Weekly export sales of soybeans showed a total of 38.4 mb (1.046 mmt) with 36 mb (979,600) for the 2016- 2017 marketing year.
This was above the 8 mb (218,800 mt) needed this week to be on pace with USDA’s January demand projection of 2.05 bb.
NOPA reported soybean crush in December was 160.2 mb, below average market expectations of 162.8 million bushels. The estimate was near the bottom end of the range of market ideas of 160 to 164.3 mb, up slightly from November’s 160.8 million bushels, but was above last year’s December crush of 157.7 million bushels.
Heavy rains in Argentina has reduced yield prospects for the corn and soybean crops there. Currently, analysts in Argentina are estimating a 4 to 7 million ton reduction in Argentine soybean production due to the excessive rainfall. This would put the crop at 52 to 54 million tonnes versus USDA’s estimate of 57 million tonnes.
Strategy and outlook: Prices rallied off support as forecasted by the COT report. Maintain re-ownership strategies.
Brian Hoops can be reached at (605) 660-1155.
This material has been prepared by a sales or trading employee or agent of Midwest Market Solutions and is, or is in the nature of, a solicitation. This material is not a research report prepared by Midwest Market Solution’s Research Department. The risk of loss in trading futures and/or options is substantial and each investor and/or trader must consider whether this is a suitable investment. Past performance, whether actual or indicated by simulated historical tests of strategies, is not indicative of future results.
Trading advice is based on information taken from trades and statistical services and other sources that Midwest Market Solutions believes are reliable. We do not guarantee that such information is accurate or complete and it should not be relied upon as such.
Brian Hoops can be reached at (605) 660-1155.
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